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What is stock trading? What is cryptocurrency? What cryptocurrency to buy?

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What is Stock Trading today and the basics of stock investing is different from what it used to be What cryptocurrency to buy is also a difficult question.

The history of what is stock trading – Stocks have existed since about 1602 when Dutch East India launched the first paper shares. The first stock exchange was founded in London in 1773. In the United States the Philadelphia Stock Exchange was opened in 1790. It was quickly followed by the opening of the New York Stock Exchange in 1792, starting the beginning of Wall Street.

A simple way of thinking about stocks, which is often ignored, is that when you buy stock you actually you buy a fraction of a company. Nowadays, it is quite easy to invest in online stocks and take advantage of owning high quality business.

Stock trading has 2 main branches that are different from each other by the way an investor invests. Investors can engage in Active Trading or Day Trading. Both of this stock trading practices are regulated in their own special way and taxed accordingly.

Active trading is when an investor places 10 or more trades in a month time.

Day trading is when the investors are buying, selling and closing their positions of the same stock in the same trading day. This way the investor profits from short term fluctuations of the price for the specified stock.

Investing office
Investing office

How to make money stock trading in online:

Before considering how to make money investing in stocks, each investor must evaluate their own time horizon, their own risk tolerance and the target results they are trying to achieve. Assessing risk tolerance is crucial to understanding how to make money investing in the stock market. Investors with lower risk tolerance would focus on a more defensive subgroup of stocks and use strategies to limit volatility in their portfolio.

Most people choose to invest for a specific reason. It could be the generation of a certain level of passive income, the increase of wealth for retirement or the saving for the purchase of a house. Different targets require different investments.

How do we make money investing in stocks?


After assessing the company profile, investors can consider several approaches to making money in stocks and earning money by investing in that company stock.

Dividends from stock trading


Dividends are some of the safest, and perhaps most predictable, ways to make money with stocks. Dividends are generally paid quarterly in the United States and semi-annually or, in some cases, annually in Europe and Australia. These tend to be predictable because the companies that choose to pay them have large and mature businesses with stable profits and cash flows. After covering the costs and running a business, they choose to return some of the excess capital to shareholders through dividends and buybacks.

How to invest
How to invest

Long-term stock trading investments


Long-term investments make money through a combination of capital gains and dividends. While dividends provide a great source of income, reinvesting them back in the stock market allows investors to benefit from ‘compounding’. Compounding refers to making a profit from principal and accrued interest.

Short-term stock trading speculation and trading


Short-term speculation and trading are riskier options to make money from stocks. They are more suitable for younger investors with a higher risk tolerance than for the investor close to retirement. Short-term trading often involves leverage or margin trading and can be achieved through the use of financial instruments such as contracts for difference, or CFDs. Speculative investments are usually short-term bets that can be made in any direction. Long positions allow investors to benefit from price appreciation while short positions make profits when the price falls.

Strategies for options stock trading


Option strategies are a more sophisticated tool for making money on the stock market. Some strategies can be used to hedge existing positions. Others, such as writing ‘covered calls’ or selling ‘put’ options for a stock you want to buy, could generate revenue through premiums. Other strategies for options are even more complex and require some technical understanding.

Major risks of investing in stocks and stock trading in general


Investing in the stock market presents certain risks. Shares are a small part of the capital structure. Shareholders are entitled to a percentage of earnings but are also the last in line in the event of bankruptcy. Usually, in a liquidation, shareholders can recover very little from their investment. In that context, a recent trajectory in the actions of American companies that have declared bankruptcy is an example of a speculative bubble.

Investing online
Investing online

What are cryptocurrencies?


Cryptocurrencies are digital goods that exist in a cryptocurrency secure network and are secured through a network of peer-to-peer computers, not in a central entity, such as a bank. Cryptocurrency, cryptocurrency or virtual currency is a type of digital currency used as a means of payment. The name comes from the fact that from a technological point of view, this transfer means of payment is based on cryptography and decentralization for transactions. You can buy, sell and hold cryptocurrencies in your crypto account of choice. The price of cryptocurrencies is highly volatile, meaning they can gain and lose value over time. Stock trading and cryptocurrency trading has some similarities but also great differences to set them apart. Stock trading usually is less risky then cryptocurrency trading but this may not always be the case.

Cryptocurrency view
Cryptocurrency view

The top 10 cryptocurrencies, by market capitalization

Bitcoin exploded, from a trading price of $ 8,166 on March 8, 2020 to a record high of over $ 60,000 on March 13, 2021. this is just to show how volatile crypto can be. Although Bitcoin is the most popular virtual currency, there are currently hundreds of cryptocurrencies worldwide, but a major group of 20 currencies make up about 99% of the market in volume, according to the encryption website CoinDesk.

In the context in which cryptocurrencies continued the growth rally in the first two and a half months of 2021, the British publication Financial News compiled a list of the 10 largest cryptocurrencies after market capitalization, on March 9, 2021.

Bitcoin
Launched in 2009, Bitcoin – or BTC can be trated with the name BTC.X.

The first and most popular decentralized cryptocurrency. It is the best accepted, has the largest volume and the largest market share. Bitcoin is the largest cryptocurrency, with a market capitalization of over $ 1.01 billion. It was created as a store of value and as a means of facilitating decentralized transactions. We will not cover all the crypto coins in this article as we think Bitcoin is the best example of what cryptocurrency is all about.

What cryptocurrency to buy?

What cryptocurrency to buy we cannot say but we can hint on the most valuated cryptocurrency coins. The top cryptocurrency choices can be established simply by running a quick online search. There you will find dozens of recommendations for how to invest in cryptocurrency and what are the latest cryptocurrency trends. Here are the top 10 picks from our own research as most popular:

1. Bitcoin (BTC)

2. Ethereum (ETH)

3. Binance Coin (BNB)

4. Ripple (XRP)

5. Dogecoin (DOGE)

6. Cardano (ADA)

7. Tether USD (USDT)

8. Polkadot (DOT)

9. Litecoin (LTC)

10. Uniswap (UNI)

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the authorFinancesParty.com Team
Finances Information researcher
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