Here you bet on rising or falling prices and want to exploit short-term price fluctuations at best and make profits from them. This investment strategy helps you to achieve short-term liquidity and high returns, but can equally turn into the opposite and cause a total loss. In addition, the active investment style is associated with a high time account. Knowledge and expertise as well as the permanent observation of the development of prices are crucial for success.

Whether you would rather trade actively or passively ultimately depends on your risk profile as well as your goal in trading. In line with your investment style, you can then invest in suitable asset classes.

Opportunities and risks of stock market trading

Stock exchange trading is often criticized for literally burning investors' money. This is only true to a limited extent. The risk of stock exchange trading should not be underestimated, of course. However, this mostly depends on one's own strategy. In general, stock market trading is very safe if the regulation of market participants is taken as a parameter. However, no one can yet forecast with a hundred percent probability how the prices will ultimately develop. A certain residual risk therefore remains even for the most cautious investor. For this reason, you should only ever invest the capital that you are prepared to lose again in the worst case or use https://exnesslatam.com/calculadora-de-pips/.

However, stock exchange trading also holds a variety of advantages for investors. Among other things, it is now lucrative to invest money on stock exchanges and not on your own account. The negative interest rates on the account are really not inviting to keep your own money in the account. Emerging penalty interest rates as well as inflation are also factors that speak against investing your own money in the bank account. Stock exchanges thus offer the chance to invest your own money in line with inflation and at best still earn a return.

My conclusion to the stock exchange trade:

Stock market trading can be worthwhile as an investment for private investors. In particular, young people who start trading early can earn high returns on long-term trades due to the compound interest effect. In general, the motto for stock market trading, as in the rest of life, is: Eyes open. There are always risks. It is therefore important to analyze your own trades. Trading software and suitable tools help you to do this. However, if you keep an eye on the price and trade with a reputable broker, you already have the basis that is necessary for stock market trading.

Frequently asked questions: 

What is the difference between stock exchange trading and direct trading?

While stock exchange trading takes place in the regulated market, direct trading is part of over-the-counter trading. In principle, direct trading eliminates the need for an intermediary between buyer and seller. However, in the case of stock exchange trading, this intermediary appears in the form of a broker, trader or dealer.

What order add-ons are there that make stock exchange trading more secure?

In stock exchange trading, for example, it is possible to hedge your own trades with stops and limits. This way you can hedge trades upwards but also downwards and thus minimize the risk.

What should I pay attention to when trading on international exchanges?

Trading on international exchanges is no different from trading on Asian exchanges. However, the time zones should be considered, as the trading hours on the exchanges always differ.