Schools that offer courses on how to trade on financial markets are receiving a lot of applications these days to enter their next semester. That is partly due to the fact that during the various lockdowns many people showed interest in the subject. Since the stock markets as a whole performed well during that time, it made a lot of people curious about how they could increase their capital.
Good traders are the most informed ones
As bitcoin went up in value throughout the last year, many people were looking for the best Forex trading platform, thinking that it was the place to buy this virtual device. The truth is, you can only buy and sell pairs of country’s currencies on that market (although it is possible to buy them with bitcoins through certain brokers). This is just one example of the complexity of the financial markets today, and why new traders need to learn the ‘how-to’ before thinking of entering a market.
Investing in a financial market may sometimes look like a guessing game, but it isn’t. It is based on information that companies have to divulge at certain times (trimestral, annual, etc), but also on a country’s growth and events going on around the world. A good trader needs to be informed about everything that is happening that could eventually have an effect on the stocks held in their portfolio, but also on others of interest to them, so that they can buy them at the right time – which usually means when they get to a lower value.
School courses: from explaining the stock market to describing what it sells
The first thing is: what is the stock market? It is basic knowledge that one needs to acquire before investing. They are spaces where companies sell shares of what they own to buyers who are interested in acquiring them. You need to be a public company to trade shares on the stock market, which means that, by law, they keep their books open to all.
The two largest stock exchanges are both located in New York in the USA. They are the NYSE (New York Stock Exchange) and the NASDAQ. The former has a market cap of $31 trillion and the latter of $11 trillion. But the financial market with they highest daily turnover is the Forex. They trade currencies daily at a rate of about $6 billion.
Types of financial markets
There is a large variety of financial markets, which is why schools offer many different courses, specialising in each one. The most known is the stock market, where people buy and sell stocks from companies. When the firm is doing well, stock price rises. Some of them will pay dividends to their stock owners. Reselling a stock at a higher value is the most common way to make money on the stock exchange.
There are many other lesser-known markets. The bond markets are where an individual can loan money to a company or an institution for a pre-established time and interest rate. The derivative markets are the most complex ones. They imply an agreement between two parties, based on the value of a financial asset. In this case, one of the two will end up making money and the other will pay that sum. The Forex market is there to enable individuals and companies to trade currencies. Although it is based on the reality of exchanging one money for another, it is also used for speculative purposes.
The trend of becoming a trader on financial markets should keep growing in the years to come. Schools have a great opportunity to gain new markets, by providing the necessary knowledge to those who want to enter the field.
