Trade Stocks with RedRock500

Stock trading is buying and selling shares of publicly traded companies. Famous stocks most Americans know include Apple, Facebook, Disney, Microsoft, Amazon, Google, Netflix, and more recently listed companies such as Uber and Pinterest.

The idea is that, for every buyer in stock market, there is a seller. When you buy 100 shares of stock, someone is selling 100 shares to you. The same when you have to sell your shares, someone has to buy them. But it is not always like this, sometimes there are more sellers than buyers (the price will fall), sometimes there are more buyers than sellers (the price will raise).  

Today’s corporate giant likely had its start as a small private entity launched by a visionary founder a few decades ago. Think of Jack Ma incubating Alibaba Group Holding Limited (BABA) from his apartment in Hangzhou, China, in 1999, or Mark Zuckerberg founding the earliest version of Facebook, Inc. (FB) from his Harvard University dorm room in 2004. Technology giants like these have become among the biggest companies in the world within a couple of decades.

However, growing at such a frenetic pace requires access to a massive amount of capital. In order to make the transition from an idea germinating in an entrepreneur’s brain to an operating company, he or she needs to lease an office or factory, hire employees, buy equipment and raw materials, and put in place a sales and distribution network, among other things. These resources require significant amounts of capital, depending on the scale and scope of the business startup. 

Stock exchanges are secondary markets, where existing owners of shares can transact with potential buyers. It is important to understand that the corporations listed on stock markets do not buy and sell their own shares on a regular basis (companies may engage in stock buybacks or issue new shares, but these are not day-to-day operations and often occur outside of the framework of an exchange). 

The prices of shares on a stock market can be set in a number of ways, but most of the most common way is through an auction process where buyers and sellers place bids and offer to buy or sell. A bid is a price at which somebody wishes to buy, and an offer (or ask) is the price at which somebody wishes to sell. When the bid and ask coincide, a trade is made. 

What affects the value of stocks?

Economics

Macro-economic factors such as interest rates, inflation, unemployment and economic growth often move stock markets. Stock markets are always rooting for more economic growth, because it usually means more profits for companies, and more profits tend to grow the value of stocks. Declining interest rates often send markets higher, because they are seen as a harbinger of economic growth. High inflation has the opposite effect, because it signals that interest rates will be rising in the immediate or near future, thus slowing economic growth.

Politics

A belief by investors that control of the government by one party or the other will hurt or benefit them can move the market as whole. This is especially true in times of intense domestic turmoil. Significant developments abroad also can affect U.S. markets. An election involving one of our major trading partners that brings to power an avowedly hostile government can push markets lower. However, the converse is also true. The election of a friendly foreign government can move markets higher.

Natural and Man-Made Disasters

Natural or man-mad disasters with economic consequences also affect stock markets. If an earthquake happens in a bustling city where there's lots of economic activity, markets will move down as investors fear a negative impact on economic growth. Similarly, if there's a disaster at a man-made facility of economic importance, such as an oil refinery blowing up, it can put downward pressure on stock prices.

Market Psychology

At the end of the day, swings in the stock market are caused by human beings. There are boom periods in a rising market when everyone wants to buy. Alternatively, there are also periods of panic when almost every investor is scrambling to sell.

Choose your platform

During our 10 years of experience, we have noticed the needs and preferenced of our customers, so we are offering them all the versions of available platforms. You can choose between RedRock500 Webtrader for PC, RedRock500 Webtrader for Android devices, RedRock500 WebTrader for iOS devices and Webtrader which is a web-based trading platform, created by our team of software developers, financial analysts and marketing department.