What is Stock Trading?

Mission statement

‘To bring educational resources and personal experience to traders and Investors alike.  To save you time and improve your financial performance’

This brings up many questions just from the title ‘What is stock trading?’


First, we must ask what is stock?  A stock is a collection of shares, so what is a share?  A share is one of the equal parts into which a company’s capital is divided. From here we can answer what is stock trading?  Stock trading is exchanging money to buy stocks in a particular company. Stocks can also be sold for a profitable investment.

How to buy stocks


The investor would buy stocks in a company that they had an interest in through a broker. There are full-service brokers and online brokers. A full-service broker is a licensed financial broker-dealer firm providing a variety of services including research and advice, tax tips and retirement planning.

An online broker, on the other hand, is a broker that interfaces with customers over the Internet instead of face-to-face. It is a brokerage firm that people visit online, rather than in a physical office. They provide trading platforms so that the customer can place trades independently often with reduced commissions per trade.


Buyers of stock can be identified as traders, investors or speculators.

Stock traders are men or women who work for themselves or for a firm, buying and selling stocks. Stock traders typically focus on making profits by taking advantage of price fluctuations on individual stocks in the market.


There are different time frames that traders use namely intra-day trading, short-term trading, medium-term trading and long term trading.

For intra-day trading or short term, trading profits are taken at the close of the market. Medium-term traders often keep trades open for days and perhaps weeks when as long term trading keep trades open months and sometimes years.


Long term traders are also known as investors as they buy and hold positions in the stock market as said earlier for years and sometimes decades with the expectation that the commitment will return a profit, basing the decision on a reasonable judgement made after thorough research. The Investor has a strong belief that the endeavour has a good probability of success.



Speculators, on the other hand, buys or sells stocks or assets following what he feels is a calculated risk but this risk has a high probability of failure. The primary difference between investing and speculating is the amount of risk undertaken.


Stock Exchanges

There are sixteen stock exchanges in the world but the major stock exchanges are:

  • The New York Stock Exchange.
  • The NASDAQ Stock Exchange.
  • The London Stock Exchange.
  • The Amsterdam Stock Exchange & Euronext.
  • The Xetra/Börse Frankfurt Stock Exchange.
  • The Warsaw Stock Exchange.
  • The Tokyo Stock Exchange.


A stock exchange is a marketplace where stocks are traded throughout the day, stock market and stock exchange terms are used interchangeably. London is the biggest stock market with a history of 300 years originating in coffee houses in the City of London. London is the first to open trading from 0800 – 16.30 hours. New York commences trading at 09.30 to 16.00 local time (approx 12.30 MT). The Tokyo stock exchange 09:00 -15.00 p.m.

Trading Platforms

Trading platforms can be accessed from a desktop computer, or apps via pads, tablets or mobile phone. This makes the stock trader the ability to be mobile and not stuck behind a computer.


Some trading companies require the trader to download the platform onto their computer to run however many trading companies now provide trading apps to allow the stock trader to login and place trades without the need to download charts.

MetaTrader 4, also known as MT4, is an electronic trading platform widely used by online retail foreign exchange speculative traders Trading in forex trading and Futures trading.

E-Trade Financial Corporation offers an electronic trading platform to trade financial assets including common stocks, preferred stocks, futures contracts, exchange-traded funds, options, mutual funds, and fixed-income investments. Wikipedia

The 8 Best Options Trading Platforms of 2019

  1. Best Overall: TD Ameritrade. Courtesy of TD Ameritrade. …
  2. Best for No Commission: Robinhood. …
  3. Best for Experts: TradeStation. …
  4. Best for New Traders: Charles Schwab. …
  5. Best for Low Costs and No Minimums: Ally Invest. …
  6. Best Per-Trade Fees: Interactive Brokers. …
  7. Best Tiered Pricing: Lightspeed. …
  8. Best for Growing Your Skills: ETrade.

Stock Trading Mentors

Much successful stock trading entrepreneur offer training in their successful trading strategies. It is here that the novice trader can sign up with a reputable trading trainer of their choice for a membership fee. You may well be invited to join them from an invitation from an email or a sign up from a search on the internet.


It is also possible to learn independently from books but you will benefit from a trading platform to experience what you are reading. There are also free webinars offered again for different trading strategies.

Many trading platforms offer free tuition and a demo account to practice on with paper money to protect you from heavy losses by trading without a sound training education.


During this post, we have taken a look at the terminology used in stock trading. By asking these very basic questions and answering them in bite-size pieces we can begin to understand ‘What is stock trading’ and build on this information.

I will be providing resources needed to fully understand stock trading and reviews on different products available that I have either bought and worked through or signed up with to give you a personal perspective for you to make an informed choice and hopefully save you time and money by learning from my mistakes.