Pining Down the Basic Facts of Financial Trading

When it comes to entering the financial trading game, it can seem complex and difficult to understand when first entering if you've had no prior training beforehand. That’s understandable really, as not all of us have had the chance to gain such knowledge, and that’s why we at the Academy of Financial Trading are here; to give you the head start you need to get a leg up in learning how to pay the financial trading game.  This way you won’t be left flying in blind, you won’t be left to make mistakes that with a little help and study you could so easily avoid.

However before coming to the sign up table, before breaking out the book and online resources and knuckling down to engage in some serious study it helps to know the basic facts, so that by the time you get into the proper parts of the study, you’re not left not knowing the very basics you need to know to get a full picture of the world of financial trading. That’s why at the Academy of Financial Trading we thought we’d start with the basics.  That’s why we’ve decided to group together a list of the most basic facts concerning the art of financial trading to help you get started.

-Financial Trading primarily centers around the buying, trading and selling of stocks, either through professional stock markets or through  online services, in individual  business’ and industries in the purpose of coming out  with more money than you came  in with.

- A share of stock amounts to the smallest unit of ownership in a company.  If you own a share of a particular companies stock, you own a part of that company. The larger the shares of stock you own, the larger percentage of the company you own.

-These stocks have been traditionally bought, traded and sold on what is known as the ‘Stock Exchange’, which is a corporate market where companies register to ‘float’ themselves and their shares for investors to buy. The largest and most famous of the stock exchanges are in London, New York, California, Germany, Hong Kong and Japan, although many nations have some form of stock exchange.

-Once you own stocks in a company, hence owning a part of that company, you are afforded voting rights on choosing that companies board of directors, as well as other matters. If the company distributes profits amongst shareholders, you are likely to receive a proportionate amount.

-There are two types of stock, common stock and preferred stock. Common stock is the one you are most likely to trade in as it represents the majority of the stock held by the public. It has voting rights along with shares in dividends. Preferred stock confers fewer rights than common, except in the distribution of dividends. 

Pining Down the Basic Facts of Financial Trading

When it comes to entering the financial trading game, it can seem complex and difficult to understand when first entering if you've had no prior training beforehand. That’s understandable really, as not all of us have had the chance to gain such knowledge, and that’s why we at the Academy of Financial Trading are here; to give you the head start you need to get a leg up in learning how to pay the financial trading game.  This way you won’t be left flying in blind, you won’t be left to make mistakes that with a little help and study you could so easily avoid.

However before coming to the sign up table, before breaking out the book and online resources and knuckling down to engage in some serious study it helps to know the basic facts, so that by the time you get into the proper parts of the study, you’re not left not knowing the very basics you need to know to get a full picture of the world of financial trading. That’s why at the Academy of Financial Trading we thought we’d start with the basics.  That’s why we’ve decided to group together a list of the most basic facts concerning the art of financial trading to help you get started.

-Financial Trading primarily centers around the buying, trading and selling of stocks, either through professional stock markets or through  online services, in individual  business’ and industries in the purpose of coming out  with more money than you came  in with.

- A share of stock amounts to the smallest unit of ownership in a company.  If you own a share of a particular companies stock, you own a part of that company. The larger the shares of stock you own, the larger percentage of the company you own.

-These stocks have been traditionally bought, traded and sold on what is known as the ‘Stock Exchange’, which is a corporate market where companies register to ‘float’ themselves and their shares for investors to buy. The largest and most famous of the stock exchanges are in London, New York, California, Germany, Hong Kong and Japan, although many nations have some form of stock exchange.

-Once you own stocks in a company, hence owning a part of that company, you are afforded voting rights on choosing that companies board of directors, as well as other matters. If the company distributes profits amongst shareholders, you are likely to receive a proportionate amount.

-There are two types of stock, common stock and preferred stock. Common stock is the one you are most likely to trade in as it represents the majority of the stock held by the public. It has voting rights along with shares in dividends. Preferred stock confers fewer rights than common, except in the distribution of dividends. 

The Rise of Financial Trading – Where is it all Going?

In the modern world of 2013, it’s never been a more exciting time to be a part of the world of Financial Trading. With the onset of technological advancements such as the internet and the smartphone, the practice is no longer restricted to the rich or trained. Financial Trading has been opened up to a public that is gradually beginning to learn how to play the game for itself. The question we at the Academy of Financial Trading want to ask, however, is now that the game is opening up to an increasingly growing amount of new players, where does it all go from here?

However, like with anything else in life, you need to know the history to know where you’re headed; By the middle ages, the concept of the money lender had become embedded into the ‘civilised’ mind set, as lenders starting trading debts between each other and began to sell debt issues to individual customers; the first investors. By the 1300’s the Venetians were particularly known for their deft skills in the field of money lending, becoming the first to start trading securities from other governments.

The first real stock exchange has been dated back to Antwerp, Belgium, 1532, as brokers and money lenders would meet to deal in business, governments and debts, although stocks didn’t really exist back then and they dealt primarily with bonds and promissory notes. This grew in the 17^th Century, as the British, Dutch and French East India Companies came into being, and this early stock market activity dominated the newly founded coffee houses of the continent as they dealt with how to handle the profits of these voyages and conquests. This lead to the South Seas Bubble, as The British East India Company gained a government backed monopoly, and then investors began to buy the first shares in the South Seas Company, which led to a financial crisis when the bubble burst. The government then actually banned shares until 1825.

The first modern stock exchange opened in London in 1773, the New York Stock Exchange opening a mere 19 years later, with greater success, due to the lack of restriction on shares. The New York Stock Exchange came to dominate the market, and as the American economy grew, so did its reputation; until the Wall Street Crash in 1929. This saw the bubbles of the 20’s post war boom burst and led to the worst economic period in history, the Great Depression; a major contributing factor to the rise of the Nazi Party.

Since world war two we have seen several booms and busts, it seems to be a common part of Financial Trading, however the industry has yet again managed to evolve. As recently as the 80’s Financial Trading was as much the providence of the rich and educated as it had been back in Antwerp, however the internet, as it did with practically every other area of life, radically changed the game. It all had to do with access to information. There was more flow of information, people could learn about the Financial Trading game with increasing ease, as resources that would have once been beyond them, were translated for the finance ignorant public via the internet.

So, where will it all go from here? Well, the biggest future contributor may be the Smartphone. It’s already changed so much about the way people live; it makes  sense that it’d do the same for Financial Trading, as it will likely make it more convenient, meaning that even more members of the ordinary public will be tempted to try it out for themselves. What is clear is that Financial Trading has always thrived, even when threatened, and it will no doubt continue to do so

The Rise of Financial Trading – Where is it all Going?

In the modern world of 2013, it’s never been a more exciting time to be a part of the world of Financial Trading. With the onset of technological advancements such as the internet and the smartphone, the practice is no longer restricted to the rich or trained. Financial Trading has been opened up to a public that is gradually beginning to learn how to play the game for itself. The question we at the Academy of Financial Trading want to ask, however, is now that the game is opening up to an increasingly growing amount of new players, where does it all go from here?

However, like with anything else in life, you need to know the history to know where you’re headed; By the middle ages, the concept of the money lender had become embedded into the ‘civilised’ mind set, as lenders starting trading debts between each other and began to sell debt issues to individual customers; the first investors. By the 1300’s the Venetians were particularly known for their deft skills in the field of money lending, becoming the first to start trading securities from other governments.

The first real stock exchange has been dated back to Antwerp, Belgium, 1532, as brokers and money lenders would meet to deal in business, governments and debts, although stocks didn’t really exist back then and they dealt primarily with bonds and promissory notes. This grew in the 17^th Century, as the British, Dutch and French East India Companies came into being, and this early stock market activity dominated the newly founded coffee houses of the continent as they dealt with how to handle the profits of these voyages and conquests. This lead to the South Seas Bubble, as The British East India Company gained a government backed monopoly, and then investors began to buy the first shares in the South Seas Company, which led to a financial crisis when the bubble burst. The government then actually banned shares until 1825.

The first modern stock exchange opened in London in 1773, the New York Stock Exchange opening a mere 19 years later, with greater success, due to the lack of restriction on shares. The New York Stock Exchange came to dominate the market, and as the American economy grew, so did its reputation; until the Wall Street Crash in 1929. This saw the bubbles of the 20’s post war boom burst and led to the worst economic period in history, the Great Depression; a major contributing factor to the rise of the Nazi Party.

Since world war two we have seen several booms and busts, it seems to be a common part of Financial Trading, however the industry has yet again managed to evolve. As recently as the 80’s Financial Trading was as much the providence of the rich and educated as it had been back in Antwerp, however the internet, as it did with practically every other area of life, radically changed the game. It all had to do with access to information. There was more flow of information, people could learn about the Financial Trading game with increasing ease, as resources that would have once been beyond them, were translated for the finance ignorant public via the internet.

So, where will it all go from here? Well, the biggest future contributor may be the Smartphone. It’s already changed so much about the way people live; it makes  sense that it’d do the same for Financial Trading, as it will likely make it more convenient, meaning that even more members of the ordinary public will be tempted to try it out for themselves. What is clear is that Financial Trading has always thrived, even when threatened, and it will no doubt continue to do so

Academy of Financial Trading Explains Booms, Bubbles and Busts- How do They Happen and How Do You Spot Them

You don’t have to be an expert in Financial Trading to know that a boom becomes a bubble and a bubble eventually bursts. The general public, which was once ignorant of this element of Financial Trading, is now painfully aware of it due to such economic phenomena as the dotcom bubble and the housing market bubble, which both spectacularly burst.

So, to ensure that you don’t become a statistic the Academy of Financial Trading has put together this comprehensive guide to booms, bubbles and busts. How do they happen, what are their consequences and how can you spot them?

Let’s start with a ‘boom’. You can define a financial boom as a period of time in which sales of a particular product or business activity increase at a rapid pace. This could happen for a number of reasons; technology advancements, social and cultural shifts, political manoeuvring, greater exposure of the product, celebrity endorsement, positive press attention etc.

This all basically comes down to the fact that the particular product or business activity in question has seen positive attention, or an advancement of some sort and has got people talking. The more people talk about it, the easier it is to clue into the fact that it is either booming or about to boom, as word of mouth, either physically, or more often these days, online, will naturally stimulate financial interest in the subject being talked about once it’s benefits are highlighted.

Now we get to the bubble, which is what the boom turns into. When it comes down to basics, a bubble is when the product that has undergone a financial boom on the market starts trading at prices that, by general consensus, exceeds it’s real value. This is the point where prices for the commodity rise to unbelievable levels because investors forget the reality as the boom encourages them to further invest, creating the situation where the commodity is attributed more value than it is worth on the market. This can be identified when you start questioning the hype. It’s a common sense thing, do your research and find out what the commodity is originally priced at and if its market value is climbing to a ridiculous level in comparison, you’ve got a bubble on your hands.

However, all bubbles burst. A bust is when the bottom falls out from under the investor as the previously high prices for the commodity in question fall rapidly. This culminates in a time where the economic growth of the product contracts, often to below the level it sat at before the boom, as the market for the product has been saturated, and less people than ever want to buy it, and consequently invest in it. Busts are the hardest thing to identify; they seem to happen so suddenly. Nobody saw it coming with the dotcom and housing market booms. However one way would to think of the product like a balloon. The boom is when it beings to have air pumped into it and the bubble is when it begins to exceed its prescribed volume. You can identify a bust by looking for the strain, like with a balloon, where the market seems to be bearing up under increasingly unfavourable circumstances.

As far as booms, bubbles and busts are concerned, only engage in the whole process if you are very confident in your abilities to play the Financial Trading game and get out well before a bust could possibly occur. If you have doubts, listen to them, get out straight away. 

Demystifying the Myths about Financial Trading with the Academy of Financial Trading

When it comes to financial trading, it really is like a game of Chinese whispers isn’t it. We start with one thing that’s relatively simple, then somehow it’s misheard, misheard again and misheard one final time until by the time it reaches our ears it in almost no way resembles what it actually is. That’s what tends to happen to the facts of the financial trading game as they circulate through the community, growing taller and taller as they pass from ear to mouth to keyboard to chat room back to ear.

This is how a culture of myth and legend has come to grow around the Stock Market to such an extent that it is now so enshrouded in fable that it obscures the truth. Don’t get us wrong, we like a little bit of mystery, but when it grows to such an extent as it has with Financial Trading, it skewers people’s impressions and distorts the real image. 

This is why Financial Trading has gained a reputation over the years that it really doesn’t deserve. Understandably, this can turn someone away from going into Financial Trading, but it shouldn’t, since most of the time the time this second hand information isn’t even accurate. So, what are a few of the most common myths about Financial Trading?

Financial Trading is Just like Gambling

We cannot begin to tell you how often we hear this one, and let us say here and now, it is very far off the mark. Whilst gambling is a past time of chance, dependent more often than not on pure luck, Financial Trading is a discipline which involves carefully assessing and studying the potential options and using variables to determine when to buy and sell shares. It requires the use of every last mental faculty you have.

It’s a Game for the Rich and Brokers

It’s certainly the stereotypical perception of the Stock Market; that’s it’s the playground of the millionaires, however, the reality differs. The onset of internet market trading has really opened up the market place, made it much more accessible to the average person, and with a little know how anyone can start trading.

What Goes up Must Come Down

It’s a fact of life that there are ups and downs, hills and troughs, and this, along with popular rumour, has led to the myth that when a stock goes up, it’s only a matter of time until it goes down. This law of physics isn’t the case, there’s no rule of thumb you can use to tell which way a stock will go, you can only assess the situation and use the facts you have at your disposal to make an informed decision.

A Little Knowledge Goes a Long Way

A lot of people seem to be under the illusion that if you have ‘some’ knowledge and a hunch then you’re onto a winner. This couldn’t be further from the case; you have to have a clear understanding of what you are getting into, because if you don’t, you will at some point make an error in judgement based on a lack of information that could have disastrous consequences.

Academy of Financial Trading’s Guide to Financial Jargon: The Useful Stuff

Getting into the financial trading game is one of the smartest things you’ll ever do, the rewards can be endless. But we at the Academy of Financial Trading know that if you ever hope to succeed playing the financial trading game, you need to know the rules.

Or in any case the terms. Like all professional sectors, the finance sector has its own language, its own way of communicating, almost like a secret code. This is hardly unusual, doctors have jargon and so do lawyers. Jargon is almost like a sign you belong in the game - if you know how to speak the language then you know how to play the game.

That’s why we’re here. Think of the Academy of Financial Trading as your translators; we help you understand how to play the game. If you want to learn to speak the language, check out our guide to some of the most basic financial trading jargon.

Trader – A trader buys and sells stock frequently to generate large returns quickly. They tend to get out of a trade before any significant losses are made.

Investor – An investor gradually builds wealth by buying and holding stocks in growing companies. They will usually have engaged in a thorough analysis of these companies to determine whether something is good value (under-priced) or bad value (over-priced).

Shares – A share is a unit of ownership in a corporation or a financial asset

Shareholder –A shareholder is an owner (usually part owner depending on how many shares they have bought) of the company they have bought shares in.

Stocks – a type of security that signifies ownership in a company and represents a claim on part of the company’s assets and earnings. There are two types of stock

-    Common Stock – This type of stock usually entitles the owner to vote at shareholders meetings and to receive dividends

-          Preferred Stock – This type of stock generally does not infer voting rights onto the owner, but they have a higher claim on assets and earnings than common shares.

Stock Market/Exchange – This is the place where Stocks are bought, sold and traded. Famous Stock Markets include The New York Stock Exchange and London’s FTSE 100.

Broker – The person who buys and sells investments and stocks for you for a commission. These are the people who carry out your wishes on the floors of the Stock Exchanges of the world.

Capital Investment – this term refers to the fund’s investment in a firm or enterprise for the purpose of helping it grow, helping it make profit and further it’s business objectives. It’s literally the money you invest in the company.

Floatation – Also known as offering or rights Issue, flotation is the process a company goes through when it puts its shares onto a particular stock market so that people can buy shares in their company.