Stock trading term comprise end less topic to discuss. there are hundreds of method used by different trader who are regular in market
Yet there is no assurance that you will not encounter the loss and only make profit out of the market
What is believe is that first of all you have to decide that whether you are doing for short term or long term holding basis .
long term and short term trading have many difference in strategies to pursue. never ever mix it up
Long term turn out investing concept where you may probably ignore any minor news which, yet driving stock marginally, may not have major impact on company fundamentals
sometime stock flow with general trend in market that even-though stock show strong fundamental but price flow in market direction
Most of the time, there are alway certain stock that move against the trend.
which means that when market indexes climbing they are falling. revers is also applicable
so here is the first step come where you have to see which stocks are following trends
generally we here to compare stock with major idices which are SENSEX or NIFTY. it will provide you usefull insight.
but it would be difficult to pick stock in this ways after all we are going to trade stock not indices
Then" what to do?'
How to Select the Stock?
Basically there are lakhs of scripes which are being traded on exchange.!!
So we have to lay down a plan to pick and trade a stock
Like any other business, you requires a strategy to follow in stock trading . otherwise you will fall in bottomless pit !!
As far as trading is concern, the first thing you need to decide is your tolerance of loss
which mean upto what extent you could bear a loss ! this is of utmost important. it will help you in deciding stop loss of trade
Stop loss is essential for trading. Never forget to set stop loss.
So now as we said above find the stock moving with indice .
Once you find stock corresponding with indices, you have to decide entry point.
Entry point should be any point in trend of price moving. here you can use technical indicator like moving avaerage and volume of stock,
One thing you should bear in mind that is no stock follow straight line graph of price
it would be always in zic zac move
When stock crosses its moving average price with high volume it would be stong indication that stock is picking trend.
if you want to confirm trend you should use RSI and MACD indicator
RSI is moving with price and gaining volume support than see MACD indicator and divergance between fast moving average to slow moving average.
it would be indication of trending of stock
You see why i am telling you to see these much of data because you will get sense of trend
fist of all you should define a list of stock which you want to trade
Do not let you greed to paralise your understanding
Means find stock with above mention criteria as a third party. otherwise you will pick false stock out of you greed .
Please Do not take impulsive decision. Losing in stock trading always happens out of greed
After all such study you can assure only 70 to 80% accuracy of result
So even if after all study you made if result do not follow and your stop loss triggers than kindly accept the loss .
never tries to cover up loss by average price by putting more money in stock
Yet there is no assurance that you will not encounter the loss and only make profit out of the market
What is believe is that first of all you have to decide that whether you are doing for short term or long term holding basis .
long term and short term trading have many difference in strategies to pursue. never ever mix it up
Long term turn out investing concept where you may probably ignore any minor news which, yet driving stock marginally, may not have major impact on company fundamentals
sometime stock flow with general trend in market that even-though stock show strong fundamental but price flow in market direction
Most of the time, there are alway certain stock that move against the trend.
which means that when market indexes climbing they are falling. revers is also applicable
so here is the first step come where you have to see which stocks are following trends
generally we here to compare stock with major idices which are SENSEX or NIFTY. it will provide you usefull insight.
but it would be difficult to pick stock in this ways after all we are going to trade stock not indices
Then" what to do?'
How to Select the Stock?
Basically there are lakhs of scripes which are being traded on exchange.!!
So we have to lay down a plan to pick and trade a stock
Like any other business, you requires a strategy to follow in stock trading . otherwise you will fall in bottomless pit !!
As far as trading is concern, the first thing you need to decide is your tolerance of loss
which mean upto what extent you could bear a loss ! this is of utmost important. it will help you in deciding stop loss of trade
Stop loss is essential for trading. Never forget to set stop loss.
So now as we said above find the stock moving with indice .
Once you find stock corresponding with indices, you have to decide entry point.
Entry point should be any point in trend of price moving. here you can use technical indicator like moving avaerage and volume of stock,
One thing you should bear in mind that is no stock follow straight line graph of price
it would be always in zic zac move
When stock crosses its moving average price with high volume it would be stong indication that stock is picking trend.
if you want to confirm trend you should use RSI and MACD indicator
- To know more about RSI click here
RSI is moving with price and gaining volume support than see MACD indicator and divergance between fast moving average to slow moving average.
it would be indication of trending of stock
You see why i am telling you to see these much of data because you will get sense of trend
fist of all you should define a list of stock which you want to trade
Do not let you greed to paralise your understanding
Means find stock with above mention criteria as a third party. otherwise you will pick false stock out of you greed .
Please Do not take impulsive decision. Losing in stock trading always happens out of greed
After all such study you can assure only 70 to 80% accuracy of result
So even if after all study you made if result do not follow and your stop loss triggers than kindly accept the loss .
never tries to cover up loss by average price by putting more money in stock