- Who is a stock trader 2. How do firms

Stock is the capital raised by a company in a financial market. It is done through the issuance and distribution of shares. Depending upon this company enters to initial public offer with some band width. That is the primary market which is entry to the share market which is secondary market. Once it has listed in the secondary market the share will be moving up or down depending upon the performance of the company. From this one can hold or sell the share. A person who buys and sells these shares in this market is stock trader.

To become a stock trader one should contact the brokerage firm or financial securities and have an account in their firm. The main thing is that he who wants to be a stock trader should have a permanent account number. The transaction in this market are securitized through this number and income tax fill returns are clearly maintained through so one can show the details about this property and not against his rules of government. This market strategy is under the control of the governing board.

There are firms who undertake the process of buy and sell. In these firms, one should register to trade in the market and become a stock trader. Stock traders are different from investors. They utilize the volatility of the market and trade every day and invest for short term. Traders gain or loss more money than investors who looks for long term and put money in good stocks whose movement is predicted to some extent and gain money. Investors look for blue chips and wait for good returns and play a good trade.

Stock traders try to rely upon the psychology of other investors and do

manipulation on this and utilize it. He should be a professional and have good fundamental foundation in trading stocks. Before knowing all this basics he would not be able to trade and if he tries to do, it would lead to huge loss. He should be careful in trading. Stock should have the capacity to analyze the stock carefully from the previous data and background of the company. Many people were doing this trade with full time and part time having another profession in parallel.

Firms have financial adviser or fund manager who is professional in trading activities in the financial markets. He advise the customers to invest in their firm and give good return One who does not have time or one who has money can give money to fund managers who makes huge money for the firm. In this case, the financial manager could be an independent professional. This may include managers dealing with investment funds, hedge funds, mutual funds, and pension funds, or other professionals in equity investment and fund management.

Active stock trader who trades each day several times and get good returns in very short time is day trader. There are different kinds of stock traders depends upon what and how they trade in the market. They include: speculator is one who do buying, holding, selling, and short-selling of stocks, bonds, commodities, currencies, and derivatives to gain from variation in its price as opposed to buying it for use or for income via methods such as dividends or interest. Speculation is different from hedging, long term investing and arbitrage.

Hedging is deals with minimum risk in business from unwanted risk, but still gains profit from an investment activity. Some of risks are natural to specific businesses, soaring of oil prices, decreasing in oil resources. Other forms of risk cannot be avoided without hedging.

Arbitrageur is who takes advantage of a price differential between two or more markets: a combination of matching deals is struck that capitalize upon the imbalance, the profit being the difference between the market prices. A market maker is a one who buys and sell price in a stock market hoping to make a profit.

Stock traders need a broker, through which trading of stock can be executed with the help of brokerage firm. He needs a simple broad band internet connection to trade shares and manage his financial portfolios which has orders for buying and selling, set stop loss. The brokerage firm maintains software and the stock trader has to open an account with them so he can trade in home itself without going to that firm for placing order. The brokerage firm gives reports on technical analysis and fundamental analysis to help traders in decision process. They trade on their own behalf, a principal, investing money on a share or other financial instrument, which they believe will increase in price aiming to sell and later with profitable earnings. They get help through recommendations or reports given by brokerage firm.

Trading process involves many costs and is not free. Stock traders have to lose so many things from commissions, taxes and fees to be paid for the brokerage and other services. According to rules he has to pay taxes to the government from the earnings and transactions/flow of money involved in trading process since each and every thing are recorded .They were so much to be taken care for the stock traders that is opportunity costs of money and time, the currency risk, the financial risk, and all the Internet Service Provider, data and news agency services and electricity consumption expenses must be added.

Stock traders should have the quality to judge positively the share he buys. Many offer courses in stock picking, and numerous experts report success through Technical Analysis and Fundamental Analysis, but trader should analyze which is good for amount he have and able to judge the share at correct level, otherwise he will be land in to trouble no income and sit with a loss and amount gets stuck in a market .He losses his valuable time and money.