Financial Markets FAQ

Derivatives are derivatives, the price of which is based on the value of other assets, which are called basic (stock, currency, goods).

The most common derivatives are futures and options..

Settlements for such assets are carried out in the future. Wherein, the price of the instrument will change following the price of its underlying asset (if stock futures, then the futures price will repeat the stock chart). There are derivatives, which in their pricing have several basic tools at once. Buying derivatives typically requires a much smaller amount of cash (about 10% real value).

The first transactions with derivative instruments were conducted in London since the middle of the 19th century..

Individuals do not have access to trading on the exchange. There must always be a broker (an intermediary), who is a professional bidder and has the appropriate license from the central bank, or other supervising organization.

Actually, working in the market, an individual has complete freedom of action with all financial instruments and is limited in transactions only by the charter of his broker and the law. From the legal side, all transactions are made by the broker himself, fulfilling the orders of their client. In addition to individuals, legal entities are actively working on the exchange. Recently, more and more organizations use the foreign exchange market to convert their assets, bypassing bank exchangers.

Futures is a contract for the delivery of a certain underlying asset at a specific time..

The buyer of the futures undertakes to purchase this underlying asset from the counterparty by the end of the term of this security. Salesman, in its turn, undertakes to sell this asset. Initially, futures were used as an insurance instrument., however, now they have become extremely common among speculators due to low commissions from transactions with them. Nevertheless, it is still a very profitable tool. It works as follows.

Let's admit, You are an oil producer. It will take some time for you to sell this product. Even perfect logistics will not allow you to sell raw materials instantly. In the same time, price changes all the time, and not always in your direction. As a manufacturer, your task is not to sell oil at the maximum rate, but to cover the cost of production and generate some profit, higher than annual inflation. At this point, futures come to the rescue.. Let's admit, that the current price is quite adequate and suits you. Until a buyer is found, until the deal is done, price may change, right? At that moment, When black gold just filled the reservoir of the enterprise, a producer can already sell several hundred oil futures in an instant, in proportion to the extracted raw materials. After that, it does not depend on fluctuations in the market.. If, after the sale, oil begins to fall in price, You will profit from the sale of futures, equal to the magnitude of this fall. If growth begins, then the futures will show a loss, which will be covered by the sale of real raw materials at an increased price.

It's the perfect insurance tool.. When it comes to speculation, then the situation is no different from trading any other instruments: bought cheaper - sold more expensive, and pocketed the difference.

The amount of funds for the initial deposit depends on those conditions, offered to the client by his broker. In fact, the minimum amount is limited by the cost of one lot of the cheapest instrument on the exchange. Technically, it is not limited in any way.. Such capital can be suitable for training. After opening an account, the investor can deposit those amounts of money, which he deems necessary (starting from one cent and pumping hundreds of millions of dollars). For the comfortable implementation of trading strategies and the compilation of investment portfolios, capital in the area is considered optimal. 5 000 – 10 000 Dollars (or their equivalents).

Bonds are a form of lending through securities.. Issuing bonds, state, or commercial organization, seek to attract free funds to cover their own needs. The bondholder is owed a certain percentage, which is his income.

This is a relatively conservative financial instrument, allowing you to receive a fixed income on a par with a bank deposit. Bonds can be quoted both in the national currency of the issuer (for the Russian Federation it is rubles), as well as in foreign currencies (Eurobonds – USD, EUR, etc.).

Commodity markets are trading platforms, which provide the opportunity to buy and sell physical goods, most often the raw material. Such markets are of interest to manufacturers, who can always sell their finished product or purchase raw materials for its production. Besides, these exchanges have a pricing function. Many retailers traditionally focus on the market quotations of their goods on the stock exchange.

For instance, Russia's leading oil companies, such as Rosneft, LUKOIL, GAZPROM and so on., determine the price of gasoline at gas stations and in wholesale trade, based on quotes, broadcast from the St. Petersburg Commodity Exchange.

Eurobonds are securities, which inherit the mechanics of ordinary bonds, but are denominated in foreign currency, most often US dollars and euros. Such assets will be of interest to those, who are looking for a conservative foreign exchange income. The issuers of such securities are various companies, and even the state. The largest corporations of the Russian Federation (Sberbank, VTB, GAZPROM) have many Eurobond issues, which can be purchased by anyone.

With the proper measure of luck, a trader can earn an unlimited amount of interest on his deposit. but, relying on chance, it is very easy to lose your capital. Speaking of stable income, a novice trader should be able to at least catch up with the level of the key rate and inflation. Profitability in the Russian market, advanced bank deposit, is already considered good (30% per annum). We are talking about a stable income in the stock market. In the foreign exchange market, it is 50-100% per annum. There will be a lot of emotional investors, who earn by 300-400%, and even per month, especially if you take FOREX. They exist at best for a few months and eventually, That concept, which gave them a huge income in the short term, will stop working.

Option is the right to sell or buy some underlying asset in the future (stock, currency, futures). This is a pure derivative, which is some kind of futures. Only in this option, the buyer and seller are not obliged to buy or sell the subject of the agreement, but only have the right to do so. Roughly speaking, This is a pass to a private club, where perhaps you can make money. And at the time of receiving the ticket, you still do not know for sure, but, The closer that day is, When will it take place?, the clearer you see, Does this campaign promise you profit?. Ultimately, you can decide for yourself, Whether you go there or not.

Everything can be done 4 type of transactions with an option:

• Buy call option.
• Buy put option.
• Sell call option.
• Sell put option.

The option itself is worth a certain premium, which the buyer pays to the seller. Respectively, the seller receives this premium as his income.

It is worth buying a call option if, if the trader is confident in the subsequent growth of the asset.

It is necessary to buy a put option, if the investor predicts a fall.

You should sell put and call options if, if sideways price movement is expected.

Options are extremely complex instruments., which are used in their arsenal exclusively by experienced traders. Such assets belong to the last stage of studying the stock market.

The variety of instruments on the exchange is limited only by the imagination of the organizers of this platform. Fairly traditional assets are represented in the Russian Federation, such as: stock, bonds, Mutual funds, currency, futures and options. The following commodity assets are traded on the leading commodity exchanges:, how: grain, oil, electric power, gold, silver, platinum, nickel, copper and other sought-after goods.

The following instruments remain the most liquid, As currency and indices. Emerging financial instruments include cryptocurrency and electronic money.

In the United States, even futures for weather and heat are traded during peak hours of thermal power plants..

This is a private person, company or other institution, who owns at least one share of the company and receives its share of its income.

It's a face, which deals with the purchase and sale of financial assets in any financial market (As for yourself, and on behalf of another person or institution). The main difference between a trader and an investor is, that investors work in the long run, while traders tend to hold assets for shorter periods of time, to use short term trends.

Traders are divided into categories:

• Scalpers – they acquire valuable assets at the ask price and immediately try to sell them at the ask price.
• Swing traders - take advantage of market fluctuations, by investing in liquid stocks and holding the position open from several hours to several days.
• Day traders - turn trades in one day. Their main tool is securities with high liquidity and volatility.
• Position traders – make money on trends, which can last from a few days to months. The bottom line is, to keep the trade open only until, as long as it makes money.

Even buying several shares with the money saved (provided they grow) in a couple of years you can get good dividends. In this case, the cumulative effect works - if you do not spend your earnings immediately, rather skillfully reinvest it in the purchase of other shares, then the amount of profit will grow more and more rapidly.

Below is a graph of capital growth with $3000 to $1 000 000 behind 11 years, subject to profitability 50% annual and monthly fees $300 during the first 10 years, profits are also reinvested:

The total was contributed 39 000 Dollars, and eventually came out $ 1 001 032.

Warren Buffett's earnings chart is very similar to this trend., only the score went to tens, hundreds of millions, and then billions:

A stock index is a collection of the value of several stocks (usually, 10-500), which reflects the general dynamics in the market. Indices can be divided into sectoral, currency and technical. They are made for, so that the investor can understand the direction of the market, looking at only one common value, without examining dozens of individual price charts. The most famous indexes are: American S&P 500 (500 enterprises), Dow Jones (30 enterprises), domestic RTS (50 enterprises), Japanese Nikkei 225 (225 enterprises), Chinese SSE (1075 enterprises).

Most liquid indices have futures and options, which allow you to make money on changes in these trading indicators.

You can choose stocks based on several approaches.. When it comes to speculation, then the trader will be interested in the most liquid instruments, which can be bought and sold at any moment. Besides, these should be sufficiently volatile assets, so that in a relatively short period of time they show good dynamics of growth or decline.

To date, such securities include shares Google, Tesla, Ford, Apple, Sberbank, VTB, MMC Norilsk Nickel, Surgut Oil and Gas, MAGNET and other blue chips.

If an investor is looking for a long-term investment, then dividend yield and long-term growth prospects come to the fore. It is best to buy such securities after pronounced corrections, using weekly or daily charts to find an entry point.

"Blue chips" are the most liquid stocks of the stock market, which are in high demand among traders. On the Moscow Exchange, the following shares can be distinguished:, how: Sberbank, GAZPROM, Rosneft, etc. On the U.S. stock exchange, Apple shares are considered top, Intel Corp., Coca Cola, McDonalds. Depending on the region, The names of the shares will change. The very name "Blue Chips" came to the stock market from the casino. Blue chips have the highest value in the game.

You need to register with a broker, Replenish your account, Install the trading terminal on your computer (A special program from the broker), choose the right promotions there, Specify the volume and buy. In the same terminal, you can sell them. Each broker offers different programs, the most famous are ROX, TRANSAQ, QUIK, MetaTrader 5.

The shares purchased by the investor are kept in the depository. Depending on the storage conditions, this service can be provided on a paid or free basis. At the request of the investor, Securities can be withdrawn to an external depository. If the shares went to a person through work or connection with any enterprise, then in order to sell them, he must first withdraw them from the registrar to the broker's depository, And only then sell.

A depository is a shareholder accounting base. Today, after buying shares, you do not receive paper certificates, Instead, you get an entry in the depository and shareholder registers that, that you own a certain number of securities of this issuer. This data is used not only by the companies themselves, but also exchanges to control the value of securities and regulate the market.

A quote is the value of a security at a given moment.

Legal entity, which develops, registers and sells securities to finance its activities. Issuers can be commercial companies, corporations, Investment Trusts, national or foreign governments. An issuer is a company, which issued shares.

Dividends are the accrued share of a company's profit to its shareholders at the end of a financial year or quarter.

To receive dividend profit, the investor must be the owner of the shares at the time of closing the register. This date is different for each company. Due to the specifics of trading on the stock exchange, the owner becomes the actual owner only on the 2nd day after the transaction. In this way, The investor must buy the securities two days before the cut-off date. In order not to worry and for sure to receive dividends, The transaction can be carried out in a week, so that there is a margin of time.

T+2 is a globally accepted form of asset delivery on the exchange. Closing the deal today, Physically, the instrument will appear on the investor's account only in two days. However, the settlement of the transaction will take place regardless of this factor. To buy or sell the same shares multiple times, No need to wait two days every time. Profit or loss is fixed instantly after closing the position.

This is a legally approved scheme of actions of the issuer for the placement of securities, In fact, this is the issue of securities and the calculation of their value.

An IPO is an initial public offering of shares by a company on the stock exchange. The stock market is divided into: 2 Sort of: Primary and secondary. In the primary market, the seller is the issuing company. In the case of GAZPROM, it will be OAO GAZPROM. The buyers are private investors and legal entities. After the placement, GAZPROM's shares begin to circulate between ordinary participants of the exchange. This is called the secondary market. Those promotions, which can be seen on the market every day (Sberbank, Ferrari, Procter & Gamble, etc.), They are traded in the secondary market. I.e, buying Rosneft shares, You don't buy them from the oil company itself, and from an anonymous counterparty. Placing securities on the IPO, Organizing company, usually, plans to earn money, Therefore, it sells shares at an extremely inflated price. Only in rare exceptions do securities continue to grow after the initial public offering.

It all depends on the value of the shares themselves. For instance, Yandex shares are worth 1900 rubles, stock Microsoft – $73. Of more than 10 thousands of shares on the international market, There is a wide range of prices from a few dollars to several thousand. For the amount of $500-1000 You can buy one share at a time 10-15 companies, By building your own portfolio.

All trading terminals publish the exchange rate per share. but, on the Russian market, trading is carried out in lots, which include shareholdings in 10, 100 and more pieces. This is done to standardize and reduce the number of inefficient transactions of extremely cheap shares, which cost tenths of a penny. Only on American stock exchanges, shares are sold individually.

Depositary receipts are securities, which certify, that the issuer's shares are held in the depository of that country, where it is located and belongs to the owner of the receipt. Having owned such a paper, its holder has the right to receive all privileges, which are due to him as a nominee shareholder.

Such a tool has been created in order to, so that investors in other countries can also trade shares of companies, who are registered abroad. For instance, American-type receipts circulate in London (ADR) on Russian stocks. Traders in the UK are free to trade these securities. They are denominated in local currency, But their rate itself does not differ from the value of their underlying asset.

The process of buying shares takes place at the moment, When exchanges are open and up, Although the order to the broker can be given at any time. On the Moscow Exchange, shares are traded during the day, with 10:00 to 19:00 by Moscow time. In the same way, exchanges open in other countries during daylight hours. A feature of trading may be the time difference, for example, Toyota shares can only be bought at night Moscow time, when it's day in Tokyo and the stock exchange is open. The working hours of exchanges are about the same for everyone, in the interval from 8 morning until 7 evenings.

The minimum amount is limited only by the price of the shares themselves, which changes every day. Of the "blue chips" can be identified VTB shares, one lot is worth 700 rubles. Also for example, Microsoft and Tesla shares are within 45 And 700 dollars respectively.

Speaking of second tier, As an example, we can cite the shares of the metallurgical company Mechel. One lot is equal to the value of one share and is 65 rubles.

Binary options are derivative financial instruments, which have clear boundaries of profit and loss. Initially, Such a contract is bought for a fixed amount. If, by the time of its expiration, the asset is in the profitable zone, the trader wins a certain premium (70-85%). In a mirror situation, the investor loses the value of the option.

As well as on FOREX, You don't need a lot of capital to trade binary options. Starting from 250 dollars, you can plunge headlong into the world of binary options trading. Minimum trades are limited only by the broker itself and can be equal to 10-15 долларам.

Earnings on binary options are not limited by anything. Each profitable trade bring a fixed profit in 70-85% of the investment amount. The percentage of profit depends on the broker and the asset.

The underlying assets of contracts are:

• The most liquid stocks (American, European, Russian, asian)
• Commodity futures (oil, gas, gold, sugar...)
• Stock Indices (also from all over the world)
• Currency pairs (more 30)

Expiration is the expiration time of a binary option. In other words, This is the moment when the deal is closed, in which the price of the asset is calculated, whether it has become higher / lower than the price at the time of purchase.

Binary options can be bought for periods – 30 seconds, 1 min, 2 min, 5 min, 10 min, 15 min and then up to a month. Most often, popular terms are from 15 minutes to time.

The CALL option should be bought then, When a trader predicts the growth of an asset.

PUT option should be bought then, when a trader predicts a fall in an asset.

If at the time of closing the transaction the price did not coincide with the direction of the forecast, The investor will lose funds in the amount of the value of the option and no more.

The "In Money" option is that option, which is in profit during the transaction and during expiration, That is, the price coincides with the forecast. "Out Money" is the other way around, the price of the asset went against the Call/Put condition of the option.

Exchange Traded Funds (ETF) is an investment fund, whose shares are traded on the stock exchange. The value of these securities changes in proportion to the change in those assets, which were acquired by the management company of this ETF. For instance, if the fund has purchased for its use a package of several shares of different corporations, then its value will grow, If these stocks are rising. Most often, funds copy the composition of stock indices, for example, Composition S&P 500, That is, the investor does not need to buy shares 500 companies, he can buy one share of an ETF fund that copies the index.

ETFs are often referred to as ready-made portfolios, since they contain a large stake in other companies.

Most of the funds are inspected by the regulator of that exchange, on which they address. Nevertheless, The reliability of the fund is of no small importance for the investor. To choose an ETF, a trader must study the ETF regulations, See the list of those tools, in which this fund invests and decide for yourself, in which market sector he wants to invest.

The management of traditional exchange-traded funds takes place, most often, passively. This means, that managers do not make too frequent transactions, by purchasing or disposing of the securities included in the ETF in order to, to receive income from short-term changes in quotes on the stock exchange. but, investing in such funds carries a certain amount of risk..

The price of the ETF itself may fall, if the tools in its composition similarly fall. Consequently, investing in foreign funds should be compared with investing in standard stocks or futures, traded on the market. The underlying risk of investing in ETFs is the downside risk. In our case, the exchange risk of funds is a fall in asset prices, included in it. The money of a foreign fund may not be fully invested in the market for a certain period of time.

ETF capital can be invested in shares of a specific company, which belongs to the narrow sector of the exchange. With the range of fluctuations in the value of ETF shares on the exchange, the fund's money will remain invested in these assets at the discretion of the management company.

A broker is a professional participant in the exchange market, which provides intermediary services for entering the stock exchange to individuals and legal entities. For the implementation of this activity, he charges his customers a certain fee. (commission, spread…).

Besides, many brokers are engaged in analytical and investment activities, conduct training sessions.

A single account is an account from which you can trade on different markets and exchanges. Previously, in order to trade on the NASDAQ exchange and, say, XETRA, Separate accounts were needed, The same applies to the securities market, futures and other instruments, as well as the currency of the account. Single account eliminates the need to open different accounts, while saving on costs.

Brokerage commissions are completely dependent on the financial policy of the broker. Nevertheless, in the Russian Federation, most companies offer roughly the same level of commission.

For active traders, it is approximately 0,03% for the stock and currency market. Over-the-counter transactions are usually much more expensive.

By purchasing derivative financial instruments, The trader pays the broker approximately 1-2 ruble per contract (1 A contract is something like 1000 Dollars). Besides, the client may be charged for the use of certain trading terminals from the company's arsenal.

In this matter, the reliability factor plays a major role.. The trader must be on 100% Be sure, that his company will fulfill its obligations. There are several points, that will help a novice investor make the right choice.

• One of the main criteria is the presence of a regulator at the broker, And the more of them, the better.
• The broker must provide support in your native language.
• It is good if the broker has an office in your area.
• A good broker is an old broker. The more years the broker has been operating, the better.

A trading platform is a trading program, which the broker provides to its clients for conducting transactions on the exchange, bypassing phone calls and using the Internet.

The broker must be sure, that no one else will be able to use your funds and conduct unauthorized trading. That is why there are many levels of protection, starting from commonplace passwords and ending with two-factor authorization using one-time SMS passwords.

The deposit can be replenished in cash at the company's office or by electronic payment by means of a bank card or EPS (electronic payment systems). Usually, Brokers provide a large list of details for replenishing your account in any convenient way for you.

Withdrawal of money takes place, As well as input. The withdrawal is made in cash at the office or by electronic payment to your same details, from which you replenished your account.

Electronic money is an alternative to real money, which is used in the calculation on the Internet.

Regulators are the highest authority on the exchange, which keeps track of, that all bidders fully fulfill their obligations. Actually, on most trading floors, the main regulator is the state, Using intermediate organizations, such as the Central Bank.

Brokers can provide market analytics and trading signals. It is beneficial for the broker for you to trade and make a profit, thereby increasing your turnover and giving more commission to the broker. Therefore, the broker provides relatively high-quality analytics and signals. But do not forget, that it is carried out by people, who may be wrong, Therefore, all responsibility for the decisions made still remains with you.

You can focus on the broker's signals and analytics, but checking it with your sources.

If the customer does not remember their password, naturally, He will not be able to log in to his personal account and trading platform. According to the broker's rules, The password can most often be recovered, by using the password recovery service via a mobile phone or by making a visit to the broker's office.

A client of a brokerage company can open several accounts both within one company, and in several. However, this rule does not apply to accounts IIS. One such account can only be opened by an individual, resident of the Russian Federation.

Technical analysis is a mathematical reflection of price charts, which allow you to make very accurate predictions about the movement of quotes in the future. Specialists, Using this method, deny the influence of such factors, Like economic and political news, macroeconomic statistics and fundamental analysis.

Fundamental analysis, on the contrary, is based on that information, which is in the public domain. Usually, These are corporate statistics, Macroeconomic indicators of states and individual companies. The main problem of fundamental analysis is, It does not give clear signals, It is necessary to enter the position and when to exit it. All news and reports can be interpreted in two ways.

If we talk about profitable and constant trading, which the trader will devote at least a few hours a day, then the best option would be technical analysis. This approach does not allow for uncertainty in the investor's plans. There is always a clear plan, who will always tell you, How to get out of this situation. The only problem is the implementation of this financial plan.. To eliminate the human factor, many traders are moving from manual trading to algorithmic, using special computer programs, who cannot emotionally and interfere with trading.

Technical indicators always provide accurate information, expressed in numbers. Here is a striking example.

Figure 1 cannot be described in any other way. A digit is a digit. No matter how much they talk about it, it will not become a deuce or a zero. The reverse situation is observed in the field of fundamental analysis. If news comes out, that oil producers did not agree on a program to reduce its production. The person to the left of the trader will say this:if production is not reduced, oil will continue to fall and sell oil futures. And the person to the right of the trader will say: if they don't want to cut production, means, expect growth in the near future, they will not work at a loss and will buy oil futures. So the trader is left alone with his thoughts.

What should he do? Buy? And can sell? Who is right, The Man on the Left, or the person on the right?

For now, he will be tormented by these questions, The technical analyst will see, that his indicator showed the number "1". He'll pick up his battered notebook, in which it will be written in black and white: 1 – means to buy, and he will buy. Will he be right? Far from a fact. But he deprives himself of painful choices and reflections, which purely physically do not make any sense.

A trend is a directional price movement in one direction. They can be both upscaling, and lowering.

• Support is the price level on the chart, from which an upward movement most often develops, or, at least, at which the decreasing ends.
• Resistance is a mirror image of support. At the resistance level, the price stops rising and very often starts to fall..

Liquidity is the ability of an asset to quickly convert into real money. Well-known stocks can be bought and sold quickly, But the shares of the third tier can be put up for sale, but long wait for buyer.

Volatility is the range of price fluctuations over a certain period of time.. If the price is actively moving, constantly moving between lows and highs, this instrument can be considered volatile. If the reverse situation is observed and the price has been standing still for a long time, then there is no volatility for the asset.

Speaking, the exchange has a market volatility index, which can also be bought or sold.

This is classic trader jargon.. Bulls, - these are those investors, who buy assets and are in a long position.

Bears are those, who predominantly open short positions and sell assets, In hope, that the fall will continue.

Macroeconomic indicators are information, which is published by various international and national financial institutions. These include unemployment statistics, Indicators of the real estate market, the volume of increase or decrease in industrial production and the overall credit burden on various states.

Market sentiment is a metaphor, which is used in the jargon of traders. It is intended to characterize, which participants in the trade are more: sellers or buyers. If the market mood is positive, expect growth. Otherwise, if the market mood is bad, sales are expected.

This is the interbank foreign exchange market., which is used to exchange currency at the market rate. There is no specific regulator here., and this site does not have a centralized trading venue. FOREX is a collection of trading participants around the world, who independently reach out to their counterparties. This market became extremely widespread among the population in the 90s of the twentieth century with the advent of computers in every home.

CFD is a contract for difference. As a matter of fact, it is a dispute between buyer and seller. The one, who wins the argument (seller or buyer), receives the difference as his income. Therefore, such contracts can be drawn up for anything: on promotions, on currency, on indices, etc.

In fact, CFDs do not differ from forex transactions, The difference can only be in assets, since there are CFDs not only for currencies, but also for shares. The trader makes a profit depending on the change in the price level. The basic essence of trading remains the same - buy low - sell high.

Leverage is borrowed money, which the broker provides at a percentage to the trader to increase the maximum position on the account. This money is only used to open a trade, and there is no other way to use them..

All currency pairs, as well as some rates of commodity assets against the dollar, e.g. gold.

A long is a purchase, Designed to increase prices. Long (from English long - long) – the entrenched notion of that, that growth is slow. Long is a position on price growth.

Short is the sale of assets, borrowed from a broker. Trader sells assets, like he has them, getting a negative amount of assets, and then buy them back, balancing the balance and returning the assets to the broker. Short (from English short - short) – the entrenched notion of that, that the fall is fast, therefore it is also called a short position.

Expert Advisors are programs integrated into the trader's working terminal, That, based on mathematical algorithms, signal entry and exit points from the market. Trading advisors are able not only to issue signals, but also automatically open and close trades for the trader, Fully automating work. Therefore, they are also called "robots".

Working with a demo account cannot show one of the most important aspects of market trading - psychology. When a trader loses virtual assets on his screen, it's just numbers for him.. But when he loses his money in the market, it's a loss for him.. A demo account cannot teach a trader how to deal with drawdowns on their account, and since there are no drawdowns in trading, demo account can lead you in the wrong direction.

You can often hear, that on the demo everything is fine with the trader, but in a real account it did not work, beginners in this case begin to blame the broker, although in fact it is not the broker that has changed, And the trader himself.

The spread is the distance between the best buy price and the best sell price in the order book.

Being a trader means understanding and feeling market movements and being able to make money on them.

Most CFDs have the most traditional assets as their underlying instruments. An example is common stock and preferred stock., raw materials assets (gold and oil), stock indices (RTS, MIX, SandP500 etc.), currency pairs (US Dollar, euros), bonds and any other instruments, which the broker wishes to provide. The assets listed above are only the most popular.

Margin is the amount of money, which the broker can provide as collateral to the trader, to receive a loan to open additional positions on your account. A margin loan differs from a regular loan in that, what is the amount of money, provided by the broker, several times higher than the amount of the deposit itself.

This is the name of special applications, which are attributes of risk management of professional traders. They forcibly limit the profits and losses of an open position, according to that trading strategy, which is used by the investor.

The minimum cost of a lot on the FOREX market is 100 000 dollars or euros. However, brokers provide an opportunity to trade thousandths and ten-thousandths of lots. In this way, You can even open a position on 1 dollars.

A trader is an active participant in trading. The operations of buying and selling tools are a real job for him. Daily or monthly, But the work, from which he receives income.

The investor occupies a slightly different niche in the stock market. For him, the purchase of shares is a form of placement of existing capital, not work. The investor is not faced with the task of earning a conditional amount of money in the market in a short time and withdrawing it. From his point of view, the top managers of the company should work, whose shares were bought on the stock exchange. The increase in the issuer's profit will affect the amount of dividends paid and the growth of the market price.

This is a fairly common approach among investors. It consists in a one-time purchase of assets and the subsequent long-term retention of these instruments in your portfolio. Wherein, The investor will not close his position, no matter what. No matter what negative news comes out, And no matter how the technical indicators "shout", The paper will remain in the portfolio until the physical bankruptcy of the issuer.

Despite the conditional simplicity of this method, He often beats most scalpers and active traders.

The position should be as diversified as possible, so that the investor does not depend on only one paper or one industry. Closing in profit occurs with a substantial profit (least 100-300%). The disadvantages of this strategy include the fact, which is completely unknown, How long will you have to be in position?, To see the profit.

Warren Buffett, The world's richest investor, adheres to this view of trade.

PAMM-account (Percent Allocation Management Modul) this is a special account, which is an alternative to trust management of capital. A PAMM account is a special trader's account, to which other people - investors - can transfer funds. Profit from trading is distributed in proportion to the contribution. Thus, the trader gets the opportunity to increase the turnover of transactions and his profit, And investors get their percentage of the profits, As a rule, these are: 50-70%.

Individual Investment Account (IIS) is a unique opportunity for residents of the Russian Federation to exempt their income from taxes on the stock exchange or receive a deduction for that amount of money, which was entered on the IIS. In the second case, the tax must have already been paid on some form of earnings. (for example, salaries).

An investor opens an IIS with his broker, deposits funds and starts trading. Income from transactions will not be subject to personal income tax. This method is suitable for active traders. An alternative is, to deposit some capital, from which personal income tax has already been withheld. This makes it possible to contact the tax office and return the paid 13%. If you buy the simplest bonds on such an account with 5-6% profitability, The holder of such an account will receive: 18-19%, without making any effort at all and without trying to predict movements in the market.

The investor has to choose only one type of benefit: or exemption from taxes on profits in the market, or the return of personal income tax from the profit already received.

One of the important conditions is that, that such an account should last for three years. If you do not wait for the end of this period, then when withdrawing funds from the IIS, taxes will be withheld in the usual manner.

The maximum bar for depositing funds into the account is 400 000 rubles annually. At the end of the three-year period, it is not necessary to immediately close the account and withdraw money. IIS does not have a maximum lifespan and can be closed with a benefit at any time after a three-year period.

The manager's offer is a list of conditions, which the client accepts, To connect to portfolio management. Modern trading systems allow even ordinary traders to create their own trading strategies based on the functionality, which is provided to them by a broker and draw up their own offers.

An investment portfolio is a well-formed set of various assets, which are traded on the stock exchange. The ownership of such assets will protect the investor's capital from inflation and help increase his savings.

Diversification is the reduction of risk by diversifying the portfolio across different industries, Markets, Exchange, currency.

The minimum deposits at most brokers do not exceed $300. But for normal trading with low risks, it is advisable to start with the maximum amount for you. It's not just a whim or words, for example, How does this affect the risks of binary options?. If the minimum trade 25 Dollars, then with a deposit in 100 Dollars, you can open everything 4 deals. If you have a deposit in 300 Dollars, then you will be ready for 12 transactions. This does not mean that you need to open trades at the same time., but shows the essence of your risks in case of unsuccessful trades, That is, the ability to continue trading without slowing down at the first loss.

To reduce risk and diversify in the stock market, The optimal amount is considered to be from 5 000 – 10 000 U.S. dollars or its equivalent.

An investment idea is a subjective vision of a group of analysts or even one specialist regarding the development of prices of certain instruments in the market in the future. Such information may be provided by analytical agencies, broker and ordinary investors. More often, This is technical or fundamental information, built on some statistical facts, which have already been published. For instance, rising unemployment in the United States will have a negative impact on the stock indices of the United States. Consequently, Under this news, you can open short positions on US indices or stocks. It is worth noting, that most of the ideas, distributed free of charge, do not carry any practical value and can lead to serious losses in the investor's portfolio. Besides, The creators of such forecasts are in no way responsible for the consequences of their assumptions.

If the investor has a working business at his disposal or holds the position of a highly qualified specialist, then it is much more profitable for him to continue to engage in his main activity, and transfer the accumulated capital to the management of specialists, who have extensive experience in the market. Many people mistakenly believe, that trading on the stock exchange is not something complicated. Even more widespread is the misconception that:, that you can successfully combine official work and active trading. In fact, it is not so. If a private investor starts making money on the stock exchange, it will take 90% of his time, which will make it impossible to continue the main work.