Stock exchanging is a good way to lose or win money and for myself going into the business field, stocks are a part of that world. What makes stocks so risky, Penny Stocks/pattern day trading and lack of knowledge. Buying and selling low costing stocks can make quick profit or lose money quickly. What makes most investors lose money is when they see a stock go down and decide to trade. Investors need to hold onto the stocks until stocks come back up (Jaffe, 2014) or generate more profit by buying more stock when stocks are at the lowest to help balance out the average, then sell when there is an opportunity to make a profit.
For new investors in the stock market, odds are stacked against them. Since the FINRA law was created, new incomers have to keep a balance of 25k dollars in their portfolio at all times to be allowed to become pattern day traders. ““pattern day trader” as any customer who executes four or more “day trades” within five business days, provided that the number of day trades represents more than six percent of the customer’s total trades in the margin account for that same five business day period”(“Pattern day trader,” 2011). Stock Market websites also costs between 5 to 10 dollars per transactions, which contributes to new investors to fail.
Stock exchanges are very risky for people who lack knowledge on working with the Market system. Stock trading has the potential to create big profit, but is very risky to get into.
Jaffe, C. (2014, February 17). Stocks are far less risky than you think. Market Watch. Retrieved from http://www.marketwatch.com/story/stocks-are-far-less-risky-than-you-think-2014-02-14
Pattern day trader. (2011, February 10). Retrieved February 6, 2017, from U.S. Securities and Exchange Commission, https://www.sec.gov/answers/patterndaytrader.htm
RefME. (2017). FREE APA citation generator & format. Retrieved February 6, 2017, from https://www.refme.com/us/citation-generator/apa/