HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

Why trade shares?


Why trade shares, continue to read and learn more. Trading shares involves buying and selling company shares listed on a stock exchange. Traders choose to trade shares as a way to potentially profit from price movements. In stock trading, a trader will buy a share at a low price and then sell it at a higher price in order to take advantage of the price difference. On the other hand, a stock investor will buy and hold a share for a longer period of time.

Trading real shares or share CFDs?

When buying or selling shares, traders can do so by actually buying the share or, alternatively, trading derivatives of the underlying asset. Such a derivative is a CFD or Contracts For Difference which allows traders to speculate on the price change of a share without owning it. In this article, we look at what trading shares involve, the advantages of shares trading and how to start trading shares with CFDs.

What are shares trading?

So, have you heard about stocks? Basically, they give you a slice of ownership in a company that’s listed on a stock exchange. When a company wants to raise more money than what it can get from its private investors or banks, they usually decide to ‘go public’ and list its stock on the exchange. That way, people like you and me can buy shares and become part-owners of the company.

So, when a company wants to sell its shares on a stock exchange, it usually does so through an initial public offering (IPO) on the primary market.

This takes the company from being solely owned by private investors to having a mix of private and public shareholders. Once the shares start trading on the secondary market, which is basically a stock exchange, the price of the shares goes up and down based on what investors think the stock is worth. So, throughout the trading day, the value of the stock can change quite a bit.

What influences the price of shares?

So, you know how stock prices can change a lot during the day or over a longer period of time? Well, there are a lot of different things that can cause those changes. Some of them have to do with the company itself, like how much money it’s making or how profitable it is. But there are also external factors that can play a role, like the overall state of the economy or any major political issues that might be happening. All of these things can affect how investors view the stock and, in turn, impact its price.

CFD trading

So, Contracts for Difference (CFDs) can help traders make bigger trades and speculate on how a company’s stock price will move, without actually owning the stock. They do this by using a margin. However, it’s important to remember that CFDs can be risky because they’re leveraged, which means that both profits and losses can be a lot bigger. But, even buying shares without leverage can also be risky, so it’s good to always be aware of the risks involved.

How to trade share CFDs

If you’re interested in trading stocks using CFDs, it basically involves a broker agreeing to pay you the difference between the opening and closing price of a security. You can either take a long position, where you’re speculating that the price will rise, or a short position, where you’re speculating that the price will fall. To get started, you can create an account with a CFD provider like T4Trade. You don’t need a separate stock trading account, you can trade share CFDs alongside other CFDs on commodities, indices and forex, all in one trading account.

Why trade share CFDs with T4Trade?

T4Trade offers margin trading so traders can trade share CFDs with limited funds in their accounts. It’s important to note that CFDs are leveraged products, which means that gains and losses can be amplified. When trading share CFDs, the trader is only speculating on whether the stock price will rise or fall, and can take a short or long position based on their trading objectives. While CFD trading shares similarities with traditional trading strategies, it tends to be shorter-term in nature due to overnight charges.

T4Trade offers an extensive educational library with useful resources to help you trade shares. Sign up with T4Trade and use our mobile or web trading apps or download MT4 and trade CFDs easily and safely.

#source


RELATED

A Guide to Demo Trading Accounts

Embarking on your trading journey is akin to stepping into a vast, dynamic universe with its own set of rules. Whether you aim to explore the realms of forex, delve into precious metals...

Bitcoin vs. Litecoin: What You Need to Know

Cryptocurrency can seem like a daunting concept. Over the past decade, interest in cryptocurrencies has increased exponentially. Bitcoin (BTC) has continued...

What are CFDs?

Before venturing into what are CFDs, first let’s take a quick look at the forex market. The forex market is the largest financial market in the world...

Common Trading Mistakes Every Trader Should Avoid

Trading in financial markets can be both exhilarating and profitable, but it's essential to navigate this world with caution and discipline. Many traders, especially beginners, often fall into common pitfalls...

How to Trade in Forex? A Useful Guide

All currencies are typically exchanged in pairs when trading forex. A currency pair quotation is made up of two currencies. The Euro and the US dollar, for instance...

Popular trading myths you need to stop believing

If you are a newbie trader and you want to learn the truth about trading, one of the first things you need to have is an accurate understanding of what trading...

The Evolution and Significance of Forex Trading

Ever since its establishment in the 1970s, forex trading has seen a rapid transformation. One of the chief driving forces behind its monumental growth has been the explosion of technology, which enabled the creation of online trading platforms...

The Art of Money Management

Beginner traders usually consider money management to be some dull paperwork; outwitting and conquering the market for a short-term profit seems much...

How to Trade CFDs on Gold and Silver

Gold and silver have been chosen by traders for hundreds of years now. These metals are always in demand, especially from manufacturers of jewellery or other sectors such as the electronics...

Trading styles

Like every other trader, whether you are a novice trader or talented expert in the field of trading forex, you come with your own unique trading style. No two traders are alike...

Bullish vs. Bearish: What's the Difference?

Bull vs bear describes investment trends that have the power to impact the global financial markets. You've probably heard investors refer to a market...

Fiat Money: Definition and Examples

In the complex world of finance and economics, fiat money plays a central role as the lifeblood of modern economies. It is the currency we use every day, the medium...

Which is the Best Online Trading Platform for Beginners?

If you are new to forex trading, then you must probably be looking for the best trading platform which is usually selected based on top-notch tools and resources...

If you invest in stocks

Having a portfolio which includes shares of roughly 20 different companies almost eliminates unsystematic risks. Thus, the portfolio risk with one share...

An Introduction to Technical Indicators

Technical indicators are calculations derived from price and volume data. They have plotted either as overlays on a price chart or below a price chart. Indicators...

Stop Loss: the lifeline of every trader

Stop Loss (SL) is one of the most important concepts in the FX market. Every trader has the opportunity to benefit from this trading tool.

Is Forex essentially gambling?

An issue for many new market entrants is the following: Is Forex essentially gambling? Each decision we make in our daily lives can be considered as a risk we take to succeed or progress in something...

The Moving Average Convergence Divergence (MACD)

The Moving Average Convergence Divergence (MACD) is a versatile and widely used technical indicator that offers insights into trends, momentum, and potential reversal points in the forex market...

Risk management in financial markets: principles, objectives, strategies

How to protect your savings and investments in a financial crisis? How to create a trading strategy capable of generating profits even in non-standard...

What is a Bear Market? A Complete Guide

Sometimes, during market cycles, the stock markets may plunge, and prices could fall. It may be for a short period of weeks or months, or even drag on for years...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.