How securities are traded on the stock exchange: a detailed analysis of the stages

Trading on the stock market is a practical capital management tool for investors of any level. Simply studying the terms is not enough to understand how securities are traded on the exchange — it is important to see the logic, tools, and strategy behind each action. This article is a step-by-step guide from opening an account to recording the results.

How to Start Trading on the Exchange

The first step is to open an account with a licensed broker. Without it, it’s like being without a safe key.
Next is access to a trading platform: an interactive terminal like QUIK, MetaTrader, or a web interface. Through it, orders for buying and selling are processed.

Before starting, it is important to understand what the stock market is. It’s not a place — it’s a system that brings together sellers and buyers of securities: stocks, bonds, derivative instruments. The main task is to redistribute capital among participants. Trading is done by those who want to lock in income or buy an asset cheaper before the price rises.

How Securities Are Traded on the Exchange

The trading process on the exchange is built on a strict algorithm — from choosing an asset to recording the results. Each stage affects the final profitability and requires precise calculation with no room for improvisation:

1. Instrument selection — a company whose assets are of interest.
2. Analysis and strategy — fundamental, technical, or hybrid approach.
3. Order placement — market or limit. In the first case, the order is executed instantly, in the second — when the desired price is reached.
4. Transaction and settlement — goes through T+2 (day of transaction + two banking days) on most markets.
5. Result fixation — dividends, asset value growth, or loss.

Participation in exchange trading happens this way — step by step, with mathematical precision and instant execution.

Exchange Trading for Beginners

A novice risks falling into the trap of emotions. The FOMO effect (fear of missing out), sudden mood swings, betting on rumors.

Only a systematic approach works. One of the reliable methods is diversification. Allocating the portfolio to different assets reduces risk and stabilizes income. For example, distribution: 40% — large stocks, 30% — corporate bonds, 20% — foreign ETFs, 10% — liquid cash.

How securities are traded on the exchange in the initial stage — through small positions, strict risk management, and continuous learning.

Professional Actions: Process Mechanics

Professional traders act not on intuition but based on data and precise models. Their decisions are the result of strict logic, market dynamics analysis, and understanding of cause-and-effect relationships in the economy. The strategy is composed of:

1. Market behavior (demand and volume indicators).
2. Company data: reports, forecasts, capital structure.
3. News: central bank decisions, geopolitics, mergers.
4. Algorithms: trading based on patterns and signals.
5. Price history: technical analysis with support and resistance levels.

This is how real participation in stock trading works — step by step, with mathematical precision and instant execution.

Tools and Principles of Effective Trading

Effective trading requires not only a strategy but also a clear set of tools. Each element forms the foundation on which the result is built — from the broker to risk control level.

What is used in real trading:

1. Broker — financial conductor. With it, an account is opened, a terminal is connected, and all transactions are recorded. Examples: Tinkoff Investments, BCS, Finam.
2. Stock market — a platform where the interests of thousands of investors converge. For example, the Moscow Exchange or NYSE.
3. Stocks — a share in a company. Buying Apple, Gazprom, or Tesla = participation in profits.
4. Bonds — debt securities. Yield varies from 6% (OFZ) to 13% (corporate assets).
5. Price — a parameter formed by supply and demand. Changes every second.
6. Income — trading result. Consists of dividends, capital growth, or coupon payments.
7. Risk — an inevitable companion. Managed by stop orders, diversification, and discipline.
8. Capital protection — a top priority. Working through trusted brokers, commission control, position hedging.

Applying these tools transforms chaotic actions into a systematic system. Only in this format is it possible to accurately understand how securities are traded on the exchange with minimal losses and maximum returns.

Factors Affecting Price

Price is not dogma. It reacts to dozens of factors. For example: MTS’s quarterly report for 2023 showed an 8.2% revenue growth. Stock assets added 4% in two days. This is not a coincidence but the market’s reaction to improved performance.

Demand is formed not only by reports but also by expectations. If the Fed hints at a rate cut, investors are more active in buying bonds — fixed yield, and capital is preserved.

To understand how securities are traded on the exchange, it is important to analyze news, monitor central bank rhetoric, and consider seasonal cycles.

Analysis Tools

Fundamental analysis evaluates the company as a business: capital structure, debts, profits, revenue, margins, market positions. For example: Lukoil maintains a stable margin above 10% and regularly pays dividends — this is an argument for long-term purchase.

Technical analysis works differently. It studies the chart. Indicators like RSI, MACD, volumes, Japanese candles — all of this allows entering a trade not randomly but with confirming signals.

This combination allows flexible adaptation to market realities. For example: NASDAQ index growth of 2.3% was accompanied by mass breakouts of resistance levels — a signal for entry into short-term speculation.

How Strategy Turns into Results

Random actions bring random results. That’s why anyone seriously studying how securities are traded on the exchange builds a strategy. For example: the “60/30/10” rule.

60% of the capital is allocated to stable stocks and bonds, 30% to ETFs and growth funds, 10% to risky assets. The strategy manages risk, provides income, and preserves money in volatile conditions.

Portfolio management is a process that requires constant adjustment. Imbalance is eliminated by rebalancing: selling what has grown, buying undervalued assets. This mechanic reduces the influence of emotions and increases result stability.

How Securities Are Traded on the Exchange: Conclusions

Working with stock assets is not a game but a clear algorithm. Those who have understood how securities are traded on the exchange work not on emotions but on calculations. From choosing a company to recording profits — each step requires data, flexibility, and discipline. It’s a skill, not a talent.