How to start investing in Stocks (Shares) on AvaTrade? Table of Contents

Trade Stock and Stock Indices on AvaTrade

Trade Stocks and Stock Indices with an award-winning regulated broker!

With AvaTrade you can trade the largest companies in the world with equity CFDs whenever you like.

BUY and SELL shares of major companies listed on the NYSE, NASDAQ, London Stock Exchange, and other stock exchanges without the fees and commissions associated with traditional stock trading.

Online index trading is a great way to speculate on the world’s major financial markets and keep up with the major stock markets.

Indices are financial derivatives calculated as a weighted average of the share prices of the best-performing companies listed on the stock exchange.

Start trading stock indices around the world and enjoy the benefits of trading with an award-winning regulated broker!

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How to start trading Stock Indices on AvaTrade?

Why choose AvaTrade to trade Stocks?

  • Globally renowned broker, with a solid track record since 2006.
  • Leverage up to 5: 1.
  • Access all major stock exchanges, including NYSE, NASDAQ, and FTSE.
  • Trade stocks, indices, and commodities from a single screen.
  • Live multilingual customer support
  • World-class learning tools and resources.
  • Different platforms: desktop, web, and mobile.

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Find out more about the Automated Copy Trading of Stocks and Indices from Global Exchanges with AAAFX.

What is CFD on Stocks (Shares)?

CFDs (contracts for difference) on stocks have become very popular recently.

When you go to open a CFD transaction, you do not have ownership of the underlying asset.

This means, for example, that you will not physically have the action of Facebook or Amazon.

On the contrary, we speculate on the price movement of the share.

The premium is the difference between the opening price of the position and the closing price, minus the spread, which represents the broker’s commission.

All of this offers a certain level of flexibility that the traditional stock market does not offer.

With CFDs, it is possible to open a sell position as easily as a buy position, thus allowing you to take advantage of price movements in both bullish and bearish markets.

For example, you can hope to make a profit by buying at a low price, and then reselling at a higher price.

The price difference is the premium generated.

Alternatively, it is also possible to sell at a high price and then buy later at a lower price.

It must be borne in mind that, since you do not actually buy the underlying asset, it is possible to operate with a leverage of up to 20: 1, which allows you to open larger positions with a limited investment.

However, leverage is, as mentioned, a double-edged sword, as it increases the possible gains, but also the risk.

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Stock Investment made simple and easy with AvaTrade

If an average investor wants to invest in stocks, he has several options at his disposal.

First, you can buy stocks directly from a stockbroker.

With this type of operation, it is possible to incur high commissions and expenses by the broker who facilitates the operation.

This dated way of investing dates back to the days when such transactions took place by telephone.

Also, some stocks are really expensive, so you need to have enough capital to get started and have an appropriate level of exposure to the markets.

Today, however, there is also online stock trading.

Traders here benefit from direct and independent access to the same global stocks provided by online brokers, which allows them to take advantage of reduced costs, even taking into account the various fees and commissions associated with trading activities.

While the minimum trading requirement is reduced with some online brokers, others have exaggerated commissions that weigh on the investor’s profit/loss ratio.

In addition, some online brokers only offer access to certain markets, such as currencies and stocks.

This way, you have limited choice in trading, especially if you prefer to trade cryptocurrencies or commodities.

If you are tech-savvy, you may have seen several investment apps.

Although these apps are practical and offer the possibility of trading shares directly from mobile, in some cases the investment opportunities are limited, as well as the general assessment of the financial situation.

Before investing, it is always good to evaluate several factors, such as your tax situation, any debts, and other investments.

This is where a regulated online broker becomes important.

Open a trading account with AvaTrade and benefit from some of the best trading conditions in the industry.

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What is a Stock Market?

The stock market is where the shares of publicly traded companies are traded both Over-The-Counter (OTC) and through centralized exchanges.

The stock market represents a free market economy, as it offers companies the opportunity to access capital in exchange for the sale of a portion of the ownership of the company to interested third parties.

The stock market offers the opportunity for investors to increase their income without subjecting themselves to the high risks, overhead, and opening costs of setting up their own business.

On the other hand, the sale of securities allows the companies themselves to expand exponentially.

When you buy stock in a company there is usually an increase in the company’s balance sheet.

For this reason, online trading on the stock market can represent a victory for both the investor and the company.

Open a Demo Account and get your € 100,000, enter the market, and trade with confidence.

It is important to understand that trading is associated with the risk (large or small depending on the number of shares purchased) of losing your investment.

To stem these dangers, the most serious brokers offer the opportunity to open demo Forex accounts to practice and practice.

If the shares of the company owned by traders lose value, even the traders will find themselves at a loss.

In particular, if a trader decides to sell his shares when the value of this is lower, the sale will result in a loss.

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Type of Stock Markets from Global Exchanges

There are different segments of the stock market that must be considered when you want to buy or are interested in the shares of a specific listed company and if it is in turn present in the

The market is divided into two sections: the primary market and the secondary market.

Primary Stock Market

The first issue securities are placed on the primary market.

It is an open stock market, where a company’s shares are first offered and sold and it is the same company that issues them on the market.

All movements are monitored through the analysis of the economic calendar.

Being listed on a primary market is a source of credibility for a company and this, in turn, leads to interest on the part of traders in the company.

The primary market is dominated by large investment institutions, such as investment banks, hedge funds, etc …

What are Blue Chips of Stocks?

Secondary Stock Market

On the secondary market, investors trade the securities already outstanding with each other, without the company that originally sold the security being directly involved in the transaction.

The purchase and sale of shares owned by investors is the most typical idea of ​​the stock market, even if the securities debut on the stock exchange primarily on the primary market.

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Over the counter (OTC) Stock market

The OTC market, also known as trading off regulated markets, allows investors to participate in the trading of securities from a decentralized market.

Decentralized means that the buy or sell transaction takes place between two parties, such as the trader and the broker.

Transactions are generally carried out electronically or over the phone, by email or via a trading platform, and not through local stock exchanges.

The OTC market is reserved for securities and prices that generally differ from those of the stock exchange.

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The Stock Exchange

The stock exchange is the traditional medium where stocks, shares, Bond spreads, and other transferable securities are traded between a stockbroker and a trader.

The stock exchange, also known simply as the stock exchange, offers an infrastructure for the issuance and redemption of financial instruments, including the payment of profits and dividends.

Other publicly traded assets include derivatives, trusts, bonds, collective investment products, and what are CFDs.

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Various ways to make profits by investing in Stocks

When it comes to investing in a company’s stock and trading, there are several strategies you can take to try and generate a profit.

1. Value investing

This is a simple trading strategy, in which certain selected stocks are traded for an amount below their intrinsic value.

This type of investor is constantly looking for undervalued stocks, from which they can generate profits.

This type of investment does not require any financial training, however, before engaging in trading and buying stocks, knowledge of trading and basic financial concepts is recommended.

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2. Price/profit ratio

The P / E ratio or P / E ratio is the measure of a company’s current share price in relation to earnings per share.

The price/profit ratio is calculated as follows: the share price of the company divided by earnings per share (EPS) = market value per share.

The P / E ratio is the dollar equivalent that a trader can expect to invest in a company in order to receive $ 1 of that company’s profits.

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3. Shares with dividend

Dividends are a tool used by companies to reward shareholders who own part of the company.

Dividends are usually paid in cash on a quarterly basis and can become a constant payment should the investment prove profitable.

In addition, dividends can generate new opportunities to purchase additional shares.

It is therefore a long-term investment with low risk, as these companies are generally financially stable, with dividends growing over time, and are companies that are committed to dividend payments.

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4. Swing trading

Swing trading has become a very popular way to trade stocks and vanilla options in the short term.

Operations usually last less than a day but can last up to two weeks.

The goal of swing trading is to identify a general trend and generate profits while the markets follow the trend.

The use of technical analysis of financial markets is an advantage in swing trading because it allows you to monitor rapid market movements as they happen.

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5. Day Trading

In day trading, we speculate on the purchase or sale of shares, trading of commodities, indices, or specific currencies in the course of a single trading day.

Positions can be opened the second the markets open or later in the day, however, all trades must be closed before the market closes on an opening day.

Traders who use this trading strategy are known as day traders.

Regardless of the type of trader you are, who perhaps prefers to invest in the short or long term, keep in mind that short-term trading is characterized by greater profits but also by a greater risk of loss, precisely because of the speed of operations.

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Start Stock CFD trading with AvaTrade

CFD trading is even easier with AvaTrade, as not only do you have access to more than 90 assets, but all traders are offered trading leverage of up to 5: 1.

You will also benefit from customer support, 24 hours a day, as well as the peace of mind of knowing that you are investing on a secure trading platform and that all traders’ funds are held in segregated accounts within the best international banks.

Join thousands of clients who already benefit from being part of the AvaTrade family, the first of the best forex brokers, and start trading in complete safety.

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What is the “Volatility” of Stock markets?

It is defined as the amplitude of the fluctuations that are often observed in the prices of individual shares, following the news, or announcements on profits.

There is always a risk associated with every reward, and stock market volatility can amplify that.

One of these is that stock market prices can move into a position against yours, resulting in a loss rather than gain.

Volatility tends to level out over time, so the key to defeating it often is to stay in the market for a long time until the ups and downs wear off.

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Where is the stock market based?

Different markets are located in different locations and certain markets or indices have no physical location at all.

For example, the NYSE is physically located in New York City at 11 Wall Street and you can actually go there and see the traders at work.

On the contrary, the Nasdaq is completely virtual, and although its headquarters in New York City, there is no physical trading place where you can go to see an exchange in outcry form.

Almost every country in the world has one or more stock markets and most of them have physical locations, but we are increasingly moving towards virtual trading.

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Why do the prices of stocks change?

Most are decided with auctions, in which buyers bid on the price they are willing to pay for an action, and sellers bid based on how much they want to receive for it.

When the two prices meet, the exchange takes place and the shares pass from hand to hand.

In the past, all these trades were carried out on the stock markets in outcry form, and the market makers were shouting at the prices at which they thought the shares should be bought or sold.

Only after the auctions did they become electronic, which is very positive if you think that the stock markets today are made up of millions of individuals, each of whom has their own ideas about the value of a stock.

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