How to Trade Stocks on IQ Option

How to Trade Stocks on IQ Option


What is CFD?

A CFD, or Contract for Difference, is a type of financial instrument that allows you to trade on the price movements of stocks, regardless of whether prices are rising or falling. The key advantage of a CFD is the opportunity to speculate on the price movements of an asset (upwards or downwards) without actually owning the underlying asset.



What Are Stocks?

Stocks, also commonly referred to as equities or shares, are issued by a public corporation and put up for sale. Companies originally used stocks as a way of raising additional capital, and as a way to boost their business growth. When the company first puts these stocks up for sale, this is called the Initial Public Offering. Once this stage is complete, the shares themselves are then sold on the stock market, which is where any stock trading will occur.

People occasionally confuse buying shares with physically owning a portion of that company as if this somehow gives them the right to walk into the company offices and begin exerting their ownership rights over computers or furniture. The law treats this type of corporation in a unique way; as it is treated as a legal person, the corporation, therefore, owns its own assets.

This is referred to as the separation of ownership and control.

The separation of these things is beneficial to both the shareholders and the corporation because it limits the liability for each party. For example, if a major shareholder were to go bankrupt, they cannot then sell assets belonging to the corporation to cover their debts and pay their creditors. This is the same in reverse; if a corporation you own shares in goes bankrupt and the judge orders them to sell all their assets, none of your own personal assets are at risk.

One thing lies at the core of a stock’s value: it entitles shareholders to a portion of the company profits.


Investing and Trading in Stocks

Stock trading has been a popular financial pursuit since stocks were first introduced by the Dutch East India Company in the 17th century.

This is both an efficient and effective type of investment for both families and individuals.

How Do I Trade Stocks?

This is how to trade CFDs on stocks on the IQ Option platform:

1. Click the “Open New Asset” button in the upper side of the screen and choose ‘Stocks’ from the list of available options. Then choose the company you want to trade. Analyze the price chart using technical analysis tools. Don’t forget to take into account fundamentals factors, as well. Then determine the trend direction and predict its future behavior in the foreseeable future.
How to Trade Stocks on IQ Option

2. Set the amount of money you want to invest in this particular deal. Remember that in accordance with prominent risk management practices, you are not supposed to allocate your entire capital to a single deal.

3. Choose a multiplier and set up the auto closing (optional). A multiplier will increase both the potential return and risk involved. By opening a $100-worth deal with a multiplier of x5 you will get the same results as if you were investing $500. It applies to both profits and losses. Auto closing will let you close the deal automatically, whether to grab your earnings or manage your losses.
How to Trade Stocks on IQ Option
4. Now, depending on your forecast, choose either “Buy” or “Sell”. When the time is right, close the deal. The bigger the difference between the opening price and the current price (if the trend direction was predicted correctly), the higher the potential profit. Keep in mind that your deal will be subject to an overnight fee, so don’t keep it open for too long.

CFD trading may seem easy due to low number of variables involved. However, it is as difficult, as it could be rewarding (if done correctly). Dedicating enough time to the company you are about to trade and learning how to use technical analysis tools in advance is always better than . Dive into the engaging world of CFD trading right now.


Stock Trading Risk Assessment

All forms of financial investment carry a level of risk, and stock trading is no different. Even traders with decades of experience cannot predict the correct price movements every single time.

People use various strategies, but it is important to note that there is no such thing as a failsafe strategy. It is also advisable to limit the amount of money you invest in a single trade, as part of your own risk management.
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