top of page
  • Writer's pictureMarc Primo

How trade-to-earn investments can affect your business

This is an article ‘How trade-to-earn investments can affect your business’ by Marc Primo

The stock market impacts businesses categorized as micro, small, to medium enterprises (MSMEs) in various ways. Just under 4,000 publicly traded stocks in the United States can be broadly classified into 11 global industry classifications. With this, there can be a wide range of effects with regular movements that can affect how they operate the business.

Business experts frequently cite the S&P 500 Index as a leading indicator of market health and one of the most significant factors.

The stock market's role in business and economy

The stock market is the financial institution wherein the equity shares of publicly traded corporations are purchased and sold while calculating the total value of all traded publicly-traded companies. Although stocks can occasionally be an unreliable indicator, both the S&P 500 and the Wilshire 5000 Total Market Index can be valuable instruments when you want to assess the state of the entire economy.

Stock market and economic indicators typically go hand in hand. As a result, when the stock market is doing well, what usually follows is an economic expansion. There are several ways to gauge economic progress, but one of the most common is watching the gross domestic product (GDP). MSME firms also produce more and typically expand when the GDP rises. Expanding corporate operations typically results in higher valuations and higher stock market returns.

According to record books, both the Great Depression of the 1930s and the Great Recession of 2007–2009 were preceded by sharp market drops. However, a recession does not always lead to market collapses, as evident during 1987's Black Monday when a globally severe and largely unexpected stock market crash disrupted Western economies.

For various reasons, the involvement of micro, small, and medium-sized firms (MSMEs) in global trade has remained restricted. They include non-tariff barriers, arduous rules, border procedures, and other restrictions to capital access, making it more challenging to engage in foreign trade. However, the World Trade Organization has introduced several programs to support MSMEs in participating more actively in international trade.

On a more local scale, businesses can hire expert brokers to take advantage of trade to earn profitability and support their businesses long-term.

Learning the basics of day trading

In a nutshell, trading securities in a day, or even a few seconds, is known as day trading. Nothing about it relates to investment in the conventional sense, and it takes advantage of the regular up-and-down price swings during a trading session. Long-term profitability in day trading depends on how traders perform or how conscientious or committed they are in how they trade.

Before Web3 platforms, the only people who could actively engage in stock market trading were those employed by blue chip companies, brokerages, or seasoned trading houses. With the birth of online trading and the direct transmission of trends, trading has been more prevalent and lucrative, even to smaller entities or individuals. More retail investors can now trade like the pros more efficiently than ever, thanks to platforms like Robinhood, Charles Schwab Corporation's 0% commissions, and other user-friendly trading apps.

To benefit from the sharp price swings, day traders purchase and sell stocks and other assets during the trading day. Day traders use a wide range of tactics and strategies to take advantage of these alleged market anomalies.

Technical analysis of price movements as a basis for day trading is frequently used, which calls for high commitment and accuracy. Day trading can grow into a successful profession (provided you pull the right strings).

However, it might be difficult for beginners, especially those without a solid plan. Remember, even the most experienced day traders can still run into roadblocks and lose money without the proper course of action and ample research.

Making the most out of trading

Looking at liquidity, volatility, and volume when deciding which stocks to buy is imperative. Experienced day traders use tools to assess candlestick chart patterns, trendlines and triangles, and volume before identifying buying points.

Also, try signing up for real-time news services, which tell you how current events can affect stock prices, and provide you with notifications when market-moving trends occur in real time. Electronic communication networks (ECN), can also show you the best bid and ask prices from a variety of market participants before automatically matching and carrying out orders.

Be aware that you're dealing with seasoned traders who mostly have mastered all the ins and outs of trading. These people can access their niche industries' most cutting-edge tools and contacts. Therefore, they are in an excellent position to succeed on most trading days. Starting your venture as a day trader to support your small business usually results in more significant income for them at first. The Securities and Exchange Commission discovered that most novice traders typically lose all of their money within a year.

In calculating your profits from day trading, consider how only 50% to 60% of the winning trades are likely to be profitable. Still, they gain more from their winners than their losers. You should always ensure that the financial risk associated with each trade is restricted to a predetermined portion of your account and that your entry and exit strategies are well-defined.

It would help if you first determined the capital you are willing to risk on each deal and remain committed to it. Many expert brokers may place trades with a risk of 1% to 2% or less of their account balance, so it's always best to set aside contingency funds that you can trade with and are willing to lose.

You may be tempted to look for bargains and lower costing stocks, but avoid penny stocks. These equities are frequently volatile, and your prospects of striking gold with them are slim to none. Many equities that trade for less than $5 per share are taken off the main stock exchanges' lists and can only be traded over-the-counter (OTC). Avoid these at all costs unless you see a genuine chance with them upon reviewing trends and good broker advice.

The stock market can occasionally make you nervous. You can expect more positive results if you have mastered how you control your impulses, hopes, and fears as a day trader and base your decisions on reason rather than emotion.


bottom of page