How to buy Shares Ever thought about buying shares? Want to know what the FTSE100 is? Everything share related is laid out in a simple to understand format right here. If you would like to Download our guide simply scroll to the bottom of the page. What are shares? The dictionary explains shares as "A part of a larger amount that is divided among a number of people, or to which a number of people contribute" This is exactly right, when you buy a share you are actually buying a part of that company, albiet very small. This means you get a small part of the companies profit, this is known as a dividend payout which can happen every 6 months or one year. Unlike when you go to a shop and you are given a price for items shares are alot different. You pay what you think a share is worth, so if one share cost £1.10 and you think it is only worth £1 then you can set to buy at £1, everyone else that are buying shares may well think they're worth more than £1 so you may not be able to buy them. What is the FTSE? The FTSE is the UK stock market, if your in the UK you would want to pay your attention to this market, if you are in the USA you would want to look at the Dow Jones. The FTSE100 is the 100 biggest UK companies in the first stock market tier. This market is very fast moving and is the one that is always spoken about. If you want to make money then this is the market to get into, people have been known to make over 800% in just one month in this market. But on the opposite scale people can lose money just as quickly. A slower UK market is the FTSE250, this is the next 250 top companies in the UK, Since this market is alot less likely to bring in quick returns major stockbrokers won't go into this market so its less volatile. Every year a number of companies are promoted to the FTSE100 and a number of companies are demoted to the FTSE250. How can i buy and sell shares? Shares are bought using a stockbroker, you simply sign up then your free to buy and sell as you please, there are two main types of shares account. One is a standard sharedealing account, I found Halifax we're the most competitive with the buying and selling fees. These standard accounts simply let you buy or sell shares with money you have in your account, so if you had £1000 in your account you could buy £1000 worth of shares minus the buying fee. The second kind of shares account is a CFD account, this stands for contract for difference. This means that you are buying (or now shorting) with the intention just to sell them to make a profit from the difference in price. This kind of account can be very dangerous to a novice as you can use leverage and usually requires that they are upto date with news and have an ability to read charts. I have found IGIndex to be good value for money and offer great service. Leverage and charts? Yes! Leverage and charts. OK in simple laymans terms leverage is used on a CFD account, most CFD accounts allow upto 90% leverage by basically allowing you to put a deposit for the share down instead of buying it outright. This means if you had £100 in your account and bought 100 shares that would usually cost £1 each you could pay just £10, leveraging this high would be a ridiculous idea though as the share price would only have to go down 9P for you to lose all of your money. Charts are used to attempt to determine how a shareprice will go. There is far too much information to put on one website and even the pro's don't know everything there is to know. There are trends which pretty much guarantee the share price will go your way, others not so likely, a good place to start is by searching for bullish reverse trends and bearish reverse trends. Bull and Bear trends Bull and Bear trends are a simple, quick way of saying the share price is going up or down. If a share price is going up then this is known as a bullish trend and vice versa is known as a bearish trend. This is where the Bull and Bear reversal comes into place. If a bullish reverse trend is going to take place a sequence is formed on a candlestick chart prior to it happening, the same would apply for a bearish trend reversal. For candlestick charts the best thing to do is search for documents and read lots of books. Shorting shares Shorting shares is in the instance where you can sell shares before you have bought them, these are usually only available on CFD accounts and the idea behind them is that you sell shares you don't own if you think the shareprice will go down and buy them back at a lower price. The end result is you get to keep the money you made inbetween. Despite what media may have told you, Short selling is not an illegal practice, it is the practive of organised short selling where numerous into the thousands decide to sell shares in order to drive down the price of a share price and buy them back at a lower price. I knew an organised short seller and at the time i was buying shares, as soon as they made the call i sold the shares i owned until they had finished the operation was that effective. Contents A beginners guide to trading. 1.What are options? A guide to trading profitably 1.The road to success: Fundamental, technical or mental analysis? Trend and charting guide 1.Anticipating others anticipation's
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