People who never traded stocks in their lives heard of Wall Street. They generally associate it with wealthy man dressed in impeccable suits that run around in skyscrapers, making millions in a blink of an eye.
Others think of the classic American drama film with the same name, which stars Michael Douglas; or the biographical black comedy, the Wolf of Wall Street,staring the charismatic Leo DiCaprio. All in all, Wall Street is iconic, we’ve all heard of it at least once in our lives and the way it has been portrayed in the cinema culture isn’t far away from reality.
Wall Street is basically an eight-block-long street located in the Financial District of Lower Manhattan, in New York City. It is also a metonym for the overall American financial markets, as the world’s two largest stock exchanges by total market capitalization; the New York Stock Exchange (NYSE) and NASDAQ are located there. Apart from the two giants, other important exchanges still have or had headquarters in the Wall Street area, including the New York Mercantile Exchange, the New York Board of Trade, and the former American Stock Exchange, which is now the NYSE. Thanks to this prominent area, New York City has been called the most powerful city from an economic point of view, as well as the world’s leading financial center!
The top shares of Wall Street
Located at 11 Wall Street, the New York Stock Exchange, commonly known as NYSE or The Big Board, is the world’s largest stock exchange by market cap. It has three major indices: the Dow Jones Industrial Average (DIJA), which covers the top 30 largest companies from the U.S.; the S&P 500, composed of the largest 500 companies that have common stock listed on the NYSE, NASDAQ, or the Cboe BZX Exchange; and finally, the NYSE Composite, (^NYA) which covers all common stock listed on the NYSE and uses free-float market cap weighting.
As of April 2, 2019 – the top 10 companies listed on the Dow Jones Industrial Average (DIJA) are:
- 3M (MMM)
- American Express (AXP)
- Apple (AAPL)
- Boeing (BA)
- Caterpillar (CAT)
- Chevron (CVX)
- Cisco Systems (CSCO)
- Coca-Cola (KO)
- Dow Inc. (DOW)
- ExxonMobil (XOM)
As you can notice, the industries the shares belong to are quite different, which might make your decision to invest in one more difficult. However, there are some criteria you can consider to help you make the most inspired decision.
How to evaluate the shares – A brief guide
So many choices and all of them look just as profitable. But don’t get fooled, that’s just the bigger picture! The stock you pick to invest must depend on your financial goals, capital and your trading style. That’s the only way you’ll gain profit, otherwise, you might as well just pick the share from the top on the list and waste your time and resources. Here is a brief guide on how to evaluate the shares before you trade them:
- Find a professional broker
No matter if you’re planning to grab quick profits or invest for the long haul; a professional, modern and safe virtual environment is essential and the firm you trade with can also have an impact on what stock you decide to invest in. TradeFW.com is a regulated broker, ideal for beginners, as it provides a plethora of modern tools, informative materials, an intuitive platform and high leverage; while also keeping your interests and capital safe.
- Trade the sectors and industries you’re familiar with
If you have experience in a certain business sector, such as information technologies or retail – why not choose a share from that industry? Investing in a company from an industry within your knowledge base helps more than you think! This way you’ll know where to find the most valuable information and buy/sell in the most convenient times.
- Check the price and volume of the stocks
Based on your capital, you will be able to filter the shares you can trade according to their price; while the volume filter will eliminate the stocks without institutional interest.
- Check the Average True Range (ATR)
The Average True Range (ATR) is a technical analysis indicator that measures market volatility. By using this indicator, you will be able to observe the average range from how high to low a share normally trades and you’ll get a clearer image of how volatile the price action can be.
- Make all the decisions based on your goals and needs
Your needs, financial goals and personality must stand at the core of everything you do! Don’t invest in Apple because you heard someone from your workplace that did so; buy Apple shares only if it is in line with your goals, trading style and financial possibilities.
The Bottom Line
Wall Street is the world’s center of stock trading and you can become part of it, wherever you are located in the world. You must work hard to succeed – but with the right decisions and a lot of patience, you too can become “the wolf on Wall Street”.