Today many want to make money in passive mode. And trading stocks online is one of the best solutions for this purpose.
However, before dealing with stocks, traders should consider a comprehensive evaluation mixing quantitative information and qualitative context. For this, it is helpful to review financial statements of corporations to clarify market trends, margin conditions, cash flow specifics, etc.
Learn more about these things from the blog and discover how DotBig exchange can support you in buying stocks profitably.
Balance Sheet Checking
This is the first thing a trader must learn when exploring the financial statement of a particular company. Balance sheet checking provides crucial data about current business assets, liabilities, and shareholders’ equity for a certain period. Simply put, it is an image of what the company has and the size of investments made by its shareholders. Thus, searching for the asset-to-liability point is important to assess the financial stability of one’s business. High-quality balance sheets mainly show a well-balanced or an excess of assets over liabilities, offering potential for viability and liquidity in the long term. The balance sheet ratio describes the company’s potentiality to perform its short-term and long-term activities and whether it can successfully overcome financial problems and uncertainties.
Income Statement
This point lets you find out the existing profitability of a company you are going to buy shares. The income statement reflects how much revenue business has got, the total costs for producing given revenues, as well as the final profit or loss. Key points to discover the income statement are revenue, working income, and net profit. By learning these factors, online traders can understand if business frequently brings income or does not. The income statement data is of a high importance as it assesses the company’s ability to develop and sustain its workflow in existing market space.
Cash Flow Statement
This is another informative indicator that demonstrates how a company generates and spends money in three main areas: operational, investment and financial activities. If the flow from operating activities has a positive vector, it means that the company is able to maintain its operations and possibly expand without relying excessively on external financing. This report also demonstrates the financial flexibility of the business and the effectiveness of money management. These are the most important elements that affect the company’s ability to overcome economic downturns and develop.
Assessment of the Current Market Status
Before choosing a company to buy a stock, a trader should understand what position it occupies in the market at the moment. This will help to assess the prospects of such cooperation. To do this, it is necessary to consider several factors: the industry in which the company operates, its market share, competition and growth potential. It is equally important to find out how well a business positions itself in its industry and how well the company is able to maintain and develop in the short and long term.
Industry Research
Start by analyzing the industry in which the company operates to get an idea of the dynamics of the market as a whole. Identify current industry trends, growth prospects, and any regulatory factors that may affect the company’s future performance. A thorough study of industry factors will help assess the company’s potential within the market environment.
Competitive Benefits
It is extremely important to understand whether business has a stable competitive advantage that distinguishes it from others. A competitive advantage may be due to innovative technologies, a strong brand, a loyal customer base, or a more favorable cost structure. Companies with strong competitive advantages often have more opportunities to capture and retain market share, leading to sustainable long-term development.
How to Pick a Qualified Broker
If you want to be confident in the online trading process, start dealing with a reliable broker. But how do you choose the best platform for buying stocks?
Here are some points to consider:
- Learn about its commission fees.
Compare the fees of several brokers to find the most suitable one. Some trading websites charge higher fees than others. Some reduce spreads and charge a fee for each trade depending on the type of account. Take these points into account and choose a brokerage platform with an affordable price, for example, DotBig broker.
- Demo Availability
A reliable platform provides a demo account. Thus, its customers can view trading services and try out some in advance. Access to the demo profile must be open for at least 30 days, and there must be enough funds in the account to test the main functions of the site.
- Round-the-clock help line
Trustworthy Forex sites such as DotBig investments provide a round-the-clock support line to solve problems encountered in online investing. Some companies offer multilingual help, which is an extra advantage for clients.
- Easy and secure payments
Decent brokerage sites ensure that the transfer of funds to and from the exchange is simple and fast. To confirm this, they provide payment tools known almost everywhere. Therefore, before registering on the exchange, check which payment gateways are available.
These are important requirements that a broker must meet in order to be considered trustworthy.
Features of DotBig Trading
Buying stocks on the brokerage site that provides high-quality service can become beneficial for seasoned and new traders.
The DotBig site was launched in 2003. The key advantage of the platform is the comfort of investing. Clients here are offered the opportunity to choose from a huge number of the most liquid assets. Due to the diversification of risks, the profitability of transactions is quite high even for novice users. The platform has an excellent reputation and many positive DotBig reviews.
Asset Selection
With DotBig, customers get access to various assets and markets, including stocks. Here are its market products one can trade and invest in:
- Forex (a great number of traditional and exotic currencies);
- Stocks (shares of the world’s top corporations);
- Crypto (digital currencies with a stable exchange rate, as well as altcoins with increased price volatility to earn on jumps in quotations);
- Commodity exchange (agricultural products, metals, oil, etc.).
To invest in different asset groups, it is not necessary to run several trading accounts. DotBig Forex broker has a multi-active account that provides access to existing financial markets.