See How Easily You Can Trade Shares

By: Melanie

To the uninitiated, share trading might seem to be steeped in mystery, but it's really not that hard to understand - especially with the Internet to help out. Really, you could say that even the simplest act is hard to perform when you know nothing about it. But once you've learned how to do it, suddenly it becomes amazingly easy. The act of trading shares is the act of buying and selling them and the first step is to buy them.

The buying and selling of shares is called stock broking and must be done by a licensed and regulated individual - which means he is trained to do so. He then offers his services on behalf of the ordinary person who wishes to indulge in share trading. Stockbrokers offer three levels of service: (a) Execution-only where the stockbroker carries out the investor's instructions to buy and sell; (b) advisory, where the broker will advise on what shares should be bought and/or sold, but he leaves the final decision up to his client and (c) discretionary, where the stockbroker makes the decisions and performs the trading for the client - but only after ascertaining the client's goals and objectives.

So when we talk of trading shares, it doesn't mean we can walk into any stock exchange and start buying or selling. This is only for those individuals who have done the study, passed all the exams and become licensed. For the individual investor, share trading means they take up one of the three options above and work through their stockbroker.

If this seems to take out all the fun, the investor must still have enough knowledge about the stock market so that he will gain a profit - at least, if taking up either option (a) or (b). Trading then becomes as simple as getting in touch with your stockbroker and telling him what to do. Or in the case of (b) listening to his advice first and then telling him what you want done. In the case of (c) you only have to let him know in the first instance what your financial goals are and then leave it all up to him.

So what's the very first step? You must have an account with a stock broking company or an intermediary who is ASX licensed. and in the current financial climate it may be wise to consult with a financial planner first.