Stock Trading Is Rapidly Developing In Many Areas
Stock trading and the stock markets play such an integral role in the modern business world that it can be hard to remember a time before they existed. Indeed, even in the last few decades, stock trading has evolved at a rapid rate. This constant change has seen trading stocks become a much different proposition from 20, 50, or 100 years ago. Of course, this evolution is to be expected when you consider that stock trading plays such a vital role at the cutting edge of business and economics.
What is stock trading?
In simple terms, stock trading involves buying and selling stocks or shares in certain companies to make money. Stock traders and investors would research the companies listed on a particular stock exchange, such as New York, to see if they thought that it was worth buying some stocks in that company. If you decided to buy the stocks and they go up in price, then you have made a profit if you sell them at the new price.
A common misconception around stock trading is that it is only for high-flying businesspeople or intellectuals. However, stock trading is in fact open to everyone. This is especially true in the modern computer age where it is easier than ever for the normal person on the street to invest some of their own money in stocks.
Of course, if you plan to get involved with stock trading, then it is advisable to set out a sensible plan. Do your research into how to invest in stocks, and find a creditable stock strategy for first-time investors that will help you make the right decisions when investing. A good strategy will show you how to do your research on companies along with how to manage your stock trading portfolio.
The history of stock trading
The origins of stock trading can be traced right back to the first stock exchange in Antwerp, Belgium in the 1500s. Though this exchange did not trade stocks in companies as such, it was set up in a similar way to the modern exchanges that we know, and certainly paved the way for what followed. The first publicly traded company that you could buy stocks in was the East India Company in 1602. Interestingly enough, during these early years of trading stocks, you would do business in coffee houses and in person. All this led to the formation of the famous stock exchanges that still operate today in London and America, among others. The London Stock Exchange was founded in 1801, while the came into being in 1817. This set the format for what we knew as stock trading until very recent times. It provided a central place for traders to work, where they could buy and sell stocks in person on the floor of the exchange. Trading in this way was a very rowdy experience with lots of shouting and noise. Manual paperwork was done upon each trade to make it official.
Stock trading in the digital age
In modern times, the advances in computer technology have seen stock trading evolve greatly. Instead of having to be physically on the stock exchange floor to trade, stock traders do it all from their desks. This has led to faster order execution, less human error, and a greater ability to research the latest news or company information.Some would also argue that the digital age has seen stock trading evolve in the strategies used and the volatility seen on exchanges. Many traders are now holding their stocks for shorter periods of time than in the past, often buying and selling in one day or quarter. This increased activity can lead to a high spike in market volatility due to the higher volume of trades taking place. The greater access to news that you have as a stock trader now seems to make it more likely that you will hold on to stocks for less time.
The future of stock trading
One thing is for sure – stock trading is not going anywhere soon. The stock exchanges are so crucial to the global economy that they will always be active and available to trade on. It would actually seem that increased activity is expected as modern computers and platforms make it easier than ever for people to trade. Some have suggested that there may one day be a merge of all the individual stock markets into one giant global one, but this would be far off if it did happen. The biggest prediction for how trading stocks may evolve is surely technology based. Advances in computer power will give even greater flexibility to how people trade, and other advances such as voice technology or AI may change the actual nature of trading itself.