The stock market has been making the news in recent years and as a lot more people continue to invest in it, it is important to understand the basics. There are many different reasons why people choose to invest in the stock market but the most common ones include the need to generate wealth over time, the need for a second source of income, to save up for retirement, and more. However, to achieve any of these, you must learn what the stock market is about, what moves the price, and how to make it work for you. 

What Moves the Market?

Stock prices change every day due to several factors, all of which contribute to the demand and supply of stocks. If there is a higher demand for stocks over the supply, the price will increase. If, on the other hand, the supply is higher, the price will fall. What determines the demand and supply include News and Trends, Socioeconomic factors, and unexpected changes like the most recent COVID-19 pandemic. 

The impact of the coronavirus outbreak on the Spanish IBEX-35 stock market was evident and a recent report published by the Statista Research Department in December 2020 shows how the market was affected throughout the year. 

To get the most of the price changes, you must follow trends and take advantage of the best times to trade. This is why it is often advised that beginners start with companies they are familiar with, as it makes it easier to track the companies and follow the trends. 

Determine Your Goals

Start by setting your goals, which will depend on several factors. Consider your current financial status and the percentage you intend to commit to investments. To determine your financial situation, consider your Employment, Debt, Family Situation, and Your Household Budget. Your goal will also help you determine the kind of trader you will be, whether it is a short or long-term trader or if you just need to invest and not trade. It also helps determine how you invest; you can either choose the stocks and invest them yourself using a broker or you allow an expert to manage the entire process for you based on your goals.

Open a Stock Broker Account

You will need an account to trade and platforms such as compraracciones.com have put together some of the best stock broker accounts that anyone can try out. There are numerous brokers today that it can get confusing while choosing, especially as a beginner. Things to consider when choosing include Security and Transparency, Commissions, Account Minimum, Account Fees, and User-friendliness, among others. You may also want to consider your geographical location and if the app is suitable for use where you are. Preferably, opt for a broker that is within your location to avoid any possible future occurrence that might affect your account. 

Bottom Line

Mastering the stock market doesn’t happen overnight; it will take a while to become an expert in the trade. However, what makes the difference is in understanding what you are trading and learning all that is there to. With time and enough practice, you will get a hang of the market and master your trading skills.