Forex trading are a proof of ownership of a company, so by buying a stock of an industrial factory, for example, only 1 lot, then you automatically become the owner of part of the hotel. Sounds lucent, is not it?
When you buy a stock, then the actual profit occurs when the company is making a profit. Then, of course, you need to know that the stock you buy is good, so your shares provide benefits. This is known as profit sharing or in financial language is the dividend.
So, the first strategy for you, knowing the performance of the company through the existing financial statements, in the language of finance known as the fundamental analysis of the company.
Personally, when I analyze a company with a focus on pursuing dividends, then I will see which companies over the last 10 years make a profit.
Profitable company shares usually have two characteristics: the company splits its profits more than once a year, and the company’s product has several competitors in the market.
And if we all shareholders benefit, do you want to sell the shares? The answer, yes and no. However, do you want to sell cheap shares from a profitable company? Of course, I think the answer is no. But what if I bid you a share, up to 2 times the price you bought? Yes, you may be interested, because you immediately get a 100% profit.
What if at the same time, everyone thought to buy and sell shares with the same number? Yes, that’s what is known as the rise in stock prices. For one of these reasons, stock prices can move up and off course.
There is a group of actors in the stock market who take advantage not from dividends distributed, but by taking advantage of rising and falling price movements.
Price movements can also be attributed to market sentiments of something, for example, due to a bad news to the company, that the board of directors of the company is entangled with tax and legal issues. This will certainly cause the company to lose confidence until the shares also hit.
If in daily we want to take the opportunity, then we need analysis of price and number of trade transaction (volume), which is better known as technical analysis.
Technical analysis is a variety of ways and can be used to find the point where you can buy a stock with a relatively cheap price, which can be sold in the next few days to make a profit.
But there is a thing to be sure when you trade the stock. Make sure that when you buy, there is always someone ready to accept if you will sell it. Because not a few stocks that you can buy, but when you want to sell again, you are difficult due to the buyer little or even no one buys.
It is very difficult to choose a profitable stock in the long term. Of course, it is easier to analyze and predict companies that have a profit trend with a relatively short period of time.