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Shares and CFD trading

PARTICIPANTS IN THE MARKET OF SHARES AND CFD

Participants-stock-market-CFD

Market shares and CFD face so many market participants in one place. All these people (traders, speculators and others.) should be aware of the forces of supply and demand, if they want to survive and make a profit. Each participant has his own plan and vision. Some of them look for a quick profit while others look for not so big profits but for a long time. Some may invest much money while others have few resources that are enough to cover the minimum in the account. It is impossible to understand what happens in the heads of all traders. But the overall perceived understanding of their motivation can help you to forecast the development of the market (the direction of movement) and you can take advantage of it. And this is the key to get more profit. 

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FACTORS THAT AFFECT THE SHARES PRICES

Factors-affecting-share-prices

Many factors influence share prices. But several key factors have an important role in determining the value of the shares.

Earnings and other fundamental data

Most often the presentation of the companies moves the prices of their shares. When you buy shares then you buy a part of the company and you are involved with some of the successes and failures. A company that performs better than others in a field of action attracts more interest in its shares. The interest means a search which leads to higher prices. The opposite is true for a company that presents itself in a disappointing way.

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MARGIN AND INTERESTS IN CFD

margin-interest

Margin

CFD market offers exciting opportunities for these traders (speculators). Dealers are willing to provide money to enable them to increase their potential for generating profits from their transactions. But before this option is given to you by your dealer you will need to show that you have sufficient funds in your account to cover possible losses which may be incurred. The money that is blocked in your account by your dealer to ensure himself is called margin.
For example, if you buy CFD of a definite company you probably will be obliged to leave 10 percent of the share price as margin. If the share price is $ 80 you should have in your account free $ 8 to prove to your dealer that you can cover any loss of at least $ 8 (10 percentile loss) if you do not know the direction of price movement.
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FINANCIAL LEVER ”LEVERAGE” IN CFD

Leverage

CFD provide a financial leverage and this is a property that most intrigues the investor himself. A great effect is achieved with levers and requires less force. In the real world they are found in many places. CFD is the levers of the stock market. They allow traders to invest smaller amounts of money to earn greater profits and therefore to realize large losses. This principle applies in CFD. You can earn money by investing entirely equity and you also can earn much more money if you use financial leverage by borrowing money from your broker. Read more: FINANCIAL LEVER ”LEVERAGE” IN CFD

SHARES VALUE

value-of-shares

The change in stock prices can be very fast and comparable to the dropping downhill by high speed train. The feeling of trading is similar and this is one of the things that make people to trade with shares and CFD. If stock prices do not change, then you will not make money in trading shares and CFD. Without investors a great part of industry and trade could not develop because the need of financing and liquidity.

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