Stocks
Trading
Guide

Trading Stocks

Stock traders buy, sell or trade stocks of certain companies on daily price movements. Short-term traders are hoping to make profits in the next minute, day or month, rather than buying stocks and holding them for a long period of time, waiting for their price to change dramatically over years.

An active trader is a trader who opens 10 or more trades during a month. They usually apply a strategy that relies on timing the market, trying to make the most out of short-term events to turn a profit in the near future.

Day trading is a strategy used by traders who play hot potato with stocks – buying, selling and closing trades of the same stock in a single day. They do not pay too much attention to the inner issues of the business. The purpose is to make a little money in the next few minutes, keep going this way during the day, until by the end of the day, they have made a significant amount of capital.

Shares of a company are a portion of ownership, which public companies allow traders to trade, buy or sell. By buying shares of a company, a trader is legally owning a percentage of that company. When you trade stocks at Ex 22, you are speculating on the direction of the future price rather that owning the stocks yourself.

The Share market is an exciting market with plenty of trading opportunities. Prices are influenced by many factors like:

Company News – Everything happens inside the company with the management, new products and services, big campaigns influence the shares price.

What happens in the market – Wider events, big news events, new competitors, supply chain problems, economic data, legislation changes, and trading fees.

There are many shared sectors to choose from: mining, banking, tech, pharmaceuticals, retail and telecommunications. It is important that you know the industry that the stock you choose to trade belongs to.

How to Calculate Profit

The results of stocks trading comes from the difference between the opening and closing price of the stock. In long trading, the profits come from the price rise, and in short trading the opposite happens, the profits are earned from the falling prices.

Let’s make some calculations:

Profit = ((Opening Price – Closing Price) / Current Price) * Capital Invested * Leverage – Commissions

For example, a trader opens a long trade for Pfizer. The opening price is $39.73. The closing price is $39.52. $250 was invested. Leverage used 1:200. In these conditions the volume is $50,000, with a commission of $4.

Profit = ((39.73 – 39.52) / 39.52) * 250 * 200 – 4

Profit = $261.68

If you choose to trade without leverage, skip the multiplying part with the leverage.

Which Shares can you trade?

When you trade stocks with Ex 22, you can trade over 20 countries including the UK, US, European, Asian, Australian stocks. You can trade stocks as a CFD or spread bet, allowing you to make profits from increasing and decreasing markets. We offer trading access on IPOs also. We are listing here the major stocks you can invest your capital in:

Top US tech shares
Salesforce, Adobe, Intel, Verizon, Comcast, Netflix, PayPal, Mastercard, Nvidia, Visa, Facebook, Alphabet, Amazon, Microsoft, Apple, Oracle, Cisco.

Top UK financial stocks
Phoenix Group, Hargreaves Lansdown, Admiral Group, Schroders, Aviva, Standard Chartered, Legal & General, Scottish Mortgage Investment Trust, NatWest Group, Lloyds Banking Group, Barclays, Prudential, London Stock Exchange Group, HSBC.

Top Eurozone stocks
Air Liquide, Schneider Electric, Airbus, Deutsche Telekom, Kering, Iberdrola, Volkswagen, Inditex, Allianz, Enel, Total, Siemens, Sanofi, Linde, AB InBev, SAP, Prosus, ASML, L’Oréal, LVMH.

Multiplier (Leverage)

A leverage multiplies your invested capital, growing your trading exposure in the market. The leverage shows how many times the volume he invested will increase.

Let’s suppose you invest $250 applying a 1:100 leverage. The total trading volume will be $25,000 ($250 * 100 = $25,000).

Keep in mind that the leverage increases both, potential profits and risk level.

A high leverage is suitable for active traders who open and close their trades during the day, meanwhile, for long-term investors, using smaller leverage would be a smarter and safer choice.

The leverage values vary in different types of assets. The larger leverage scopes can be applied while trading currency pairs, and smaller ones while trading digital currencies.