Introduction
As any experienced online stockbroker might tell you, the options for people who want to trade for profit in this market are diverse. The appetite for risk determines the trading profile of an investor. The long-term investors usually trade for stable profits on the long term, based on organic growth of the companies they have in their portfolio, while the short-term traders will use the intra-day fast platforms to obtain profits. Both those trading methods have their advantages and disadvantages.
Step 1
The long-term investments have a little disadvantage, as the investor will not have access to the money for a long time. Usually, those investments are made for one or two years, and during this time, the investor will lose the benefits if he wants to liquidate the investments.
Step 2
However, this is a safer method and it is not so complicated, as the investor will not need to check the value of the stocks every day. If you want to trade for profits this way, you will need to have large sums at your disposal and some patience to wait for the results of your investments.
Step 3
The short-term transactions are usually made by advanced traders with technical analytics skills. If you want to trade for profits this way, you will need the help of a broker, and you will also need to place your financial resources into liquid stocks that can be easily transformed in cash.
Step 4
As time passed, analysts observed some patterns on the stock market. For example, a rumor about a company will certainly influence the market one way or the other. The secret here is to anticipate the move of the price considering those aspects, and people who trade for profits using those short-term methods need access to advanced software.
Step 5
As a single investor, you might choose to trade alone using the online platforms of the brokers, allowing you to trade for profits this way. However, the help of a broker might be required in this case. If you want to trade for profits in this manner, you will have to master the online instruments, to read the news and to anticipate any move of the market in your favor.
Tips
Even if the American and major European stock markets are liquid enough to allow short-term trades, there are some stocks that are not so attractive to the traders. For example, you might be stuck with many stocks just because you cannot find a buyer for your package, just because it is too big or it has a big price. In this case, you will need to divide your package into several lots, so the smaller investors would be able to trade for those lots with smaller sums.
There are also disadvantages in this kind of trading, as the commissions requested by the online brokers are usually higher for transactions with a small volume, so you will have to estimate your benefits before getting involved in a transaction of this kind.
