How professional day traders really make money in the stock market is a question that I get quite frequently. There is an aura around Wall Street and the stock market that involves a lot of money. Most people are vaguely acquainted with the stock market and only understand that there’s a lot of money involved. Some of us in recent years have even begun to dislike everyone associated with the stock market because they have all the money akos forex blog we are supposed to have.
If you can beat them join them right? As I continue to get more and more questions about day trading I plan on explaining a bit more on what day trading is and how I teach people to make a living doing it. The financial system is significantly more complex than it used to be even 10 or 20 years ago. The basic premise behind why the stock market exists is because companies need money to grow. After a company gets to a certain point they need more money to grow. A private company turns into a public company and that is when a company first appears in the stock market.
EBay is the 21st century version of a garage sale, we have things we don’t need that still have value and we want money for them. Eventually a company gets so large that they stop lending money from their friends, local banks, and family. They go public to receive a cash infusion they need to keep growing and compete in their industry. Once a person initially invests in a company via stock market we become part owners of the company. Stock markets deal in shares of stock.
This is relative because there are actually millions of shares of stock for certain companies. If we want to purchase a camera or laptop we will look in the electronics section. When one wants to purchase a new bed we look in the furniture section. The NASDAQ composite index for example is mostly known for having technology stocks. So once a company goes from private to public we begin to invest in it. The left over shares have value and the general public decides what that value is based on the stock market.