Stocks

On Sunday July 10th this year, the Australian Labor Gillard Government announced a new carbon tax to be levied on the top 500 polluters in Australia. The companies would be taxed at $23 per metric tonne of carbon emissions starting at the beginning of the 2012-2013 financial year, July 1, 2012. The release of the news of the carbon tax has certainly affected stock prices across the Australian stock market and may affect your share trading.

A stock broker's job involves a fast paced working environment where pressures are high and the risks are higher. The broker may find himself selling certain plays to their clients whose decision may yield a huge commission. Anyone can be a stock broker but not everyone can be successful in it.

Stock prices are influenced by supply and demand, and other 'subtle' factors. Stock prices change throughout the day and "price" is basically a record of the last trade that closed. So how does a trade happen? Remember that there is a buyer (bidder) queue and a seller (offer) queue, both sorted by price and arranged on a first come, first served basis. When one of the bidders offers a bid amount high enough to match a seller's lowest price, or a seller lowers the price to match a bidders offer, a trade happens.

Every trade starts with a stock. But with a multitude of stocks in the market, which one do you choose and how do you decide? more importantly, what's the right signal to buy a stock?

Assumptions

Before your carve out your golden rules, you have to ask yourself a couple of questions first. Your criteria will depend on your needs and expectations.

• Are you a trader or investor?
• How long are you willing to trade?
• Do you tackle risks head on or avoid it?
• Are you after dividend payouts or stock growth?

Anyone who has watched the film Wall Street knows how exciting and lucrative the business world can be. With the technology we have today, a regular John Doe can become the next millionaire with the right moves. Unfortunately like the movie, the stock market is a cut throat world where hard earned savings crash and burn.

Decide your Future

Share trading will suit some, not others. Same goes for derivatives. Some people start with stocks first, then move on to derivatives when they're experienced. To be successful in anything, research and learn as much as you can about what you're investing in, so you can formulate a good strategy.

You trade because you want to profit, and you do this by picking the right stock or taking advantage of a stock moving in the "right" direction.

Stock selection requires a lot of research and knowledge about the stock market. General tips include picking blue chip stocks with competitive advantage, subscribing to analyst reports, understanding how to skew your trading to a positive expectancy, and working out intrinsic value.

You trade because you want to profit, and you do this by picking the right stock or taking advantage of a stock moving in the "right" direction. Stock selection requires a lot of research and knowledge about the stock market. It's akin to choosing a great cricket team.

For the beginner trader, the 2000 companies listed on the ASX can be daunting. Research is your friend, and make sure to have a goal so you can develop the strategy to help you reach it.

Here are some tips to select the right stock:

What is share trading? Of course you may say - the answer is simple: "Share trading is the activity of actively trading shares in the view of making a profit". Simple wasn't it? Well, case closed, we can all go home now. Well, I want to probe into what share trading really is in reality, not some non-sensical theory that seems impractical in the real world. Sure, the laws of supply and demand rule the markets, but what I want to discuss is what share trading means to the retail trader: traders like you and me.

Can I purchase stocks on my own or do I have to use a broker or an online trading company?

You can acquire stocks in the following manner:
1. Gift - they are given to you as part of your salary or Christmas present.
2. Dividend reinvesment plan
3. Direct on-market purchase through a broker
4. Sometimes from the company if they are issuing more shares
5. If brand new company - buy shares from IPO
6. Through executing derivatives such as options

If there is anymore please let me know.