What is trading in a share market?


When an investor buys shares in a company, this makes them part owners of this company. If an organisation wants to raise more funds for expansion purposes, it becomes a publicly-traded company. By going public, it can avoid having to apply for loans and therefore incurring debt. 

The pricing of the stock is determined by open bidding. When the stock is popular, it increases in price.

The stock market is a network of economic transactions, while stocks are shares of businesses. 

Investopedia defines stock exchanges as “places where buyers and sellers of shares meet and decide on a price to trade”. 

When buying shares on the stock market, you buy from another shareholder, not the actual company. Prices of shares in a share market are set in numerous ways. 

Trading includes frequent buying and selling of stock, currency, commodities or other instruments. It requires a lot of discipline and profits are dependent on a fair amount of risk management.  

Trading in a share market requires an individual to have a clear strategy in place prior to beginning. They should also know why they have chosen this particular form of trading, because it will determine how they place trades as well as the amount of risk they are willing to take. 

Trading in a share market means that individuals have to know what is happening around the world, which could potentially affect the prices of shares, thereby affecting their strategies. Being informed about various developments is a key part of the process. 

It also means that a trader should know that they have selected the right kind of trading platform to suit their particular trading needs and objectives.


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