![Understand how stock market works<br />These days, maximum people invest their money in stock market but only a few people know how stock market works . We often hear in news that Dow Jones in 50 points up today, NASDAQ is 20 points down today. Have you ever thought that what stock exchange is, who runs it? Have you ever seen an auction? If you have seen then you can understand share’s movement very well. Like these, there are so many queries about stock market. Without knowing everything about stock market, never invest in it. <br />Every stock moves on behalf of its index. Now you should come to know what index is. An index (NYSE, Dow Jones, NSE, BSE, NASDAQ, S&P 500) is made up of some company’s shares. Dow Jones’s index is made up of 30 company’s shares. S&P 500 is made up of 500 company’s shares. If Dow Jones is 50 points up, that means the average value of those 30 companies is up and vice-versa. There are two types of stock exchanges. 1. Physical Stock Exchange 2. Virtual Stock Exchange.<br />,[object Object]](https://image.slidesharecdn.com/understandhowstockmarketwork1-110616045416-phpapp01/85/Understand-how-stock-market-works-1-320.jpg)
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Understand how stock market works
- 2. Virtual Stock Exchange: - It is the place where shares are traded electronically. You cannot buy or sell shares directly even online in stock market. For trading, you need the services of broker. NASDAQ is an example of Virtual Stock Exchange. After learning about exchanges, now you have to learn how share prices move. The movement of share price depends upon supply and demand policy. This supply and demand policy further depends upon other factors like financial prospect of the company and many more. When the market is going up and the transactions is up it means market is profitable and if market is down and stock is also going down the chances of profit are less. In negative market, either only short sellers can gain profits or normal investors just hold their shares. This is the way to stay in stock market. For getting profits in stock market, you just have to focus on How stock market works.<br />http://www.howstockmarketworks.com.au<br />