How To Trade Equities


Equity trading is centred on the stock value of a company, something which can be greatly impacted by a company’s perceived performance. For example, if a trader thinks it likely that a company’s shares will increase in price, they may decide to buy shares in that company. If the price of those shares does increase, the investors will earn a profit. However, if the trader’s prediction was incorrect, and share prices for that company decrease in value; if the trader decides to close the trade as a result, they will have made a loss on that position.


Conversely, if a trader predicts that a company’s share price will decline, they may decide to sell their stock in order to buy it back at a later date for a lower price. However, if the stock appreciates in value rather than depreciating, they may be forced to buy the stock back at a higher price than that which they sold it for and incur a loss as a result.

Trading Equities: Trading Hours

Trading Equities: Trading Hours

Trading Equities: Trading Hours

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For those just starting to trade equities, it is worth noting that traders can only buy or sell a stock when the index listing that stock is open. This is more common when trading stocks that are only listed on a single index. For example, if you wanted to open a trade on M&S shares, you could only do so during the FTSE100 trading hours, from 08:30 to 16:30. Nonetheless, traders can still place buy or sell orders outside of these time periods to be activated after the opening of the markets.

Trading Equities: Keeping on top of industry events

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In attempt to gain an insight into the future movement of a certain company’s stock price, experienced equity traders will research and closely monitor the industries and businesses related to the stock that they have positions in. This is important, as news updates within a sector can quickly cause significant movement in the stock market, and may help a trader with future predictions of what and when to buy and sell.


However, a stock may not always move according to the trader’s expectations based on one piece of industry news. For example, if a company’s earning reports indicate a tough quarter with a dramatic fall in profits, a trader might assume that the stock price of that company would fall in sync with this news. However, if soon after, that same company announced its plans to carry out a sizeable share buy-back, there’s a fair chance that its stock price would soar, despite a bad quarter. Traders who only took the first piece of news into account could incur losses if the stock price moved in the direction opposite to the trader’s prediction.

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