Participants in the stock market

The main actors in the stock market are, of course, big mutual funds, major investment companies and banks. They are such as accumulate funds of ordinary depositors, which is several hundred thousand. Their deals are always quite high and, as a rule, the deal does not go in one day, and stretched for a few, as appears on the market counterparties on the other side wanting to make a deal. Large investment companies have well-diversified portfolio of securities, which allows them to be in a stable condition in comparison to other investors.

Typically, the development strategies in such companies is a group of professional analysts, rating the most fundamental factors. The actions of these analysts, as a rule, is always limited and strictly controlled by the supreme leadership of the company, and are aimed at avoiding unnecessary risk investments with a proposal for a trader. Efforts to this command entirely recovered thanks to the high volume of transactions in which even minor fluctuations in price have a significant income. Moreover, the analytical departments of major investment firms and mutual funds have the latest software analysis and the latest developments in computer technology and telecommunications. Major investment companies also have a full range of information services, moreover, with their brokers on the exchange, they can make their own quotes purchase, speaking, in such a way as a market maker, but this will be written below.

A more limited companies have less capital. These companies typically can not carry out their transactions on favorable exchange rate for them, because of the small volume of transactions. Nevertheless, they have successfully diversified their capital, but were unable to keep up to date equipment and software are equally large companies. Analysis Division market less qualified, because of the fact that the company could not initially appoint a high salary for such a responsibility, and to link future earnings for future income earned through these traders for the company. Partly because of that company's traders enter into a risky transaction, in order to obtain more profit, but on the other hand, they risk a lot to lose. Because of these factors, companies with small capital, have fewer opportunities to generate income from investments in securities, as large companies, and the way to the Revenue for more risky.

However, the weak and vulnerable in terms of these factors are the ordinary investors. Going to the market through a broker, they enter into a minimum transaction allowed the market and a few lots. The situation is made worse at times and that those few lots were purchased through margin accounts, provided by a broker, at the price proposed by the broker. In such circumstances, ordinary investors can not have a well-planned portfolio of the 4-10 attacks. They lack the tools and opportunities to buy large batches of stock and to monitor each of them, as well as in margin account, they will be able to follow only the movements of quotations of securities 1-3, controlling the time the broker will offer to update your account or sell some of the securities .

Most ordinary investors, before arriving at an investor in the stock market, engaged in activities or as a non-investment, or playing the stock exchange. Sometimes these people lack the knowledge, and reading one or more pamphlets or books on market analysis, feel half-professional players, but it is not so, and as will be shown below those of ordinary players and investors in the vast majority of cases will directly depend on their the ability to control their emotions and psychological state, with control of open positions.

Ordinary investors, as opposed to investment companies are not able to get fresh quotes and economic news in real time and thus quickly respond to them, except for this market analysis of these investors restricted their personal views on the analysis. Software and computer-assisted ordinary investors also lagged behind those that are used in smaller investment companies. All these factors have led to the weak position of ordinary investors in the stock market.

Then look at the classification of participants in the stock market in market terms. In terms of strategy they are divided into four groups, each of which is in compliance with the name of four animals: bulls, bears, pigs, sheep.

As you know, bull horns, beat the enemy from the bottom up, so the bull market is associated with the buyer, the player who makes a bet on improving quotations and wins when prices rise. Bear on the contrary, the defense, beat the enemy paw down, so the bear went into the jargon of market participants, as the seller, the player who bet on the decline, and wins when prices fall.

Pigs are alchnye players. Having lost all of the greed of caution, they fall under the knife. Some pigs are buying or selling prohibitively high for those positions, progoraya at the first slight movement of the market is not in their favor. Other разоряются, perederzhav position, that is, continuing to wait for even greater profits, although the trend has turned.

Sheep are timid players boyazlivo following trends, rumors and gurus. From time to time they natsepiv a bychi horn or a well-bearskin, trying to act as experts. However, they are easily recognizable by жалобному bleyaniyu when the market come hard times, such as, for example, the lack of trend.

As soon as the doors open markets, the bulls are beginning to buy, bears to sell, close and violation of pigs and sheep. It is these groups of exchange, serving buyers and sellers, prices are formed, which in turn depend on the price of demand and price proposals. "The price of demand" is the price, which asks for the desired goods to the buyer, and the "offer price" is the price, which proposes to sell the goods. Disputes between buyers and sellers due to discrepancies in prices of supply and demand and are permanent.

Buyers want to pay as little as possible, and the sellers ¾ take as much as possible. If the two teams will each stand on their own, without changing the price of supply and demand, the transaction will never take place. If the deal does not take place, the market did not get the price of the paper, as the price of supply and demand only the desired price of the seller and buyer. A seller has a choice: either to wait for price increases, or to agree to a proposed lower price. A buyer also has a choice: either to wait for lower prices, or nadbavit its price. The transaction takes place at a time when both parties to assess the market the same way: a pushy bull, agreeing on the terms of the seller pays for the product more, or timorous bear, agreeing on the terms of the buyer sells the goods cheaper. Throgmorton Street ranged his presence led to action, and the bulls and bears. They speed up the negotiation process between the bulls and bears, as the competitors themselves are able to intercept and advantageous position before.

The buyer knows that if it is too long razdumyvat, another dealer, interfering in the bidding, uvedet goods. And the seller knows that if you do not sbavit price, another dealer, interfering in the bidding may go to the assignment of another seller. Abundance hesitant dealer encourages buyers and sellers be posgovorchivee with each other. The transaction takes place at a time when the two men ¾ the buyer and seller evaluate the market equally.