Is trading in the Stock market safe?
It is 100% safe. But if you are a beginner or making continuous losses you might think that the stock market is fake and spam.
Let me explain why the stock market is legit and how the market is monitored.
The legitimacy of the stock market?
Price of Gold, Silver, Petroleum, Diesel, your currency is fixed by the trading price. If the stock market has this much control this must be legit.
Many countries spend 7% of their wealth on Gold, 4% on energy, and all the transactions were made in money/currency. In globalization, your currency is valued based on its value with other currencies. Gold, Crude oil(Petrol, Diesel), Natural gas were traded in dollar terms. Based on the currency conversion of your currency with dollars determine the price of the commodity.
All the products imported or exported were determined by the currency value. So trading helps in valuing the currency. So that traders can get the appropriate value. Without having the value of the currency, your currency is just a piece of paper. Valuing the currency determine the power of buying and selling your country on the global stage. So stock market values the currency based on parameters such as inflation, Money printed, Gold reserves, etc. to determine the price and value the same. If you believe it or not you are living in this system.
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Economy:
Most of the economy in the world is decided by the stock market. Anyone in the world can make billion only with the help of others. We are not living in King’s rule now for the wealth to be inherited. If we provide enough value you will earn money as a by-product. Your idea can be big and profitable and you can’t afford that much money at the beginning but if you make other people accept your idea, you can get the funding for providing a small part of your business to the investor.
The Stock market is the place where you get the money from the public for a small part of the business. You can work on your dream creating value and earn the money. You will be provided the small profit/Share to your shareholders. Unless banks, companies don’t have to pay you back but they are obliged to spend the money carefully for earning money.
The stock market just values the price of the stock by trading stock. It is a forum/market where the price is decided and the transaction happens. The whole economy is built on the system. About 90% of big companies will be grown from the stock market. The changes in stock prices will impact the amount of tax received, jobs of people, Economy overall.
Cheaters in the market:
Similar to any other field, you can see cheaters in the stock market. Some brokers sell your user information to a third party. Many stock market services companies do the cold call asking for a fixed price to provide the recommendation. Keep in mind if you are new to trading.
Never subscribe to these services. No big company will ask for money for selling recommendations for pennies from you. If anyone is sure about their recommendation, they won’t be selling the information. They will be making profits out of them. Many people running TV shows providing incorrect information and making money out of those recommendations. Beware of those frauds and try to learn the markets to make money.
Regulators:
The stock market is extremely complex. Government agencies run the stock market earnings in taxes to cover the expenses. All the country will have regulators to monitor fraudulent activities. The promoter of the company cannot just go buy and sell randomly to increase or decrease the price of the stock. There are regulation and process that needs to be followed to perform any big actions.
Do not blame others and the market for your losses. It’s just like any other business. You should know the risk and reward of the business before entering them. Make sure to think that the competition is between you and the market. This will improve your skills and avoid blaming the system.
Signing-off
Chandramouli
