As we well know in ForexSQ, in the world of financial markets, there are plenty of instrument to invest in. One of them is the stock market, where equities, stocks or shares are traded. A share is the ownership of a certain portion of a corporation. Once you own shares you are entitled to gain money from two sources: capital and dividends. Capital gains occur when the price of the stock rises. Dividends is a payment from the corporation to the shareholders. You can lose money if the price of a stock falls, while it is impossible to have “negative” dividends.
If you are an investor looking for “dividends” in the long run, then you should check which companies usually distributes profits to its shareholders. Not all companies have the same dividend policies. The questions of when to buy become less relevant if the investor only looks for a divided and to hold the stock for a long-term.
On the other side, the “when” becomes very important if the investor is looking for the stock’s price to rise and therefore achieve capital gains. Investors could look for capital gains in the short, medium and long-term; one could even become a daily trader, buying and selling stocks several times during a single day.
The question of when to buy becomes extremely important for a day trader and perhaps even more important when to close the position. The combo of options to invest also includes the possibility of “shorting” stocks. That is, to earn money when the price of a stock drops.
If the when to buy matters, the when to sell matters most because it is when one closes a position the moment when gains are materialized. You can own stocks that have risen 5%, but as long as you don’t sell them, you have not materialized any gains, you’re still on the market; yes, up 5% but still exposed to a change in the trend that could wipe all your gains out and transform that 5% gain into a 5% loss. Before deciding to buy a stock you need to have a trustable broker, one that offers you competitive prices and that suits your risk profile. After that, the best moment to buy a stock is when you have defined when, or under what circumstances, you will sell or close that position.
Risk Disclosure Analyzing your financial situation, you should decide whether you should start Forex trading or not. Rates of currencies can go down or rise higher any day, any hour, any minute so you should risk only that much which you can afford to loose.
Editors’ Picks
EUR/USD flirts with daily highs, retargets 1.1900
EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.
GBP/USD remains well bid around 1.3650
GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.
USD/JPY edges up above 153.50 with all eyes on US CPI figures
USD/JPY appreciates above 153.00 but remains on track for a 2.4% weekly loss. Trading volumes remain subdued on Friday, ahead of the IS CPI release. The Yen remains supported by hopes of a stable government and calls for further BoJ tightening.
Editors’ Picks
EUR/USD: Yes, the US economy is resilient – No, that won’t save the US Dollar Premium
Some impressive US data should have resulted in a much stronger USD. Well, it didn’t happen. The EUR/USD pair closed a third consecutive week little changed, a handful of pips above the 1.1800 mark.
Gold: Metals remain vulnerable to broad market mood Premium
Gold (XAU/USD) started the week on a bullish note and climbed above $5,000 before declining sharply and erasing its weekly gains on Thursday, only to recover heading into the weekend.
GBP/USD: Pound Sterling remains below 1.3700 ahead of UK inflation test Premium
The Pound Sterling (GBP) failed to resist at higher levels against the US Dollar (USD), but buyers held their ground amid a US data-busy blockbuster week.
Bitcoin: BTC bears aren’t done yet
Bitcoin (BTC) price slips below $67,000 at the time of writing on Friday, remaining under pressure and extending losses of nearly 5% so far this week.
US Dollar: Big in Japan Premium
The US Dollar (USD) resumed its yearly downtrend this week, slipping back to two-week troughs just to bounce back a tad in the second half of the week.
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