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The Basics Of Trading In Stocks

The Basics Of Trading In Stocks

For many stock markets is like the exercise in chaos. Trading in the stock market means buying and selling of stocks in the financial market. Our stock market system is very robust and easy to understand and all thanks to technology which has made it possible. Gone are the days when you have to call your broker ask the price and then initiate the trade. Now you can easily do it all on your own and that too through mobile apps.

You may often hear and read the explanation about why the market has fallen or risen. However to know the accurate reason you have to do a complete research and that is where Top stock brokers in India comes in handy as they send their clients a detailed report on the market movement. Here are mentioned some of the basic information on stock market on how it behaves and reacts and how buying and selling is done:

  1. Buy Low and Sell High: Theres no secret that buying at a lower price and selling at a higher price is the key factor in successful stock investing. However it is exactly the opposite of most of the traders and investor do in the market. The reason why this happens is that investors generally get excited seeing a stock going higher and take an entry at a premium price so that they dont miss out on the action. Thus they buy high and suddenly when the stock starts falling they are left with no option but to sell it and hence end up making huge losses.
  2. Understanding Number Game: If you want to understand the market then understanding the stock quotes is very important. Here number means looking at their average trading price their YTD returns and their 52 weeks high and low and the stock movement in recent past. Another important thing in this number game is stock PE (Price To Earnings Ratio). Once you have understood this game it will help you take entry at the right time and also will help you define your stop losses and profit booking targets. Thus having the account with top stock brokers in India will help you understand this game.
  3. Use Trailing Stop Losses: The worst ever feeling comes when your executed trade which is in profit goes in the loss. Hence the basic rule of investing is that you should protect your profit using trailing stop losses. As soon as your stock starts advancing you should keep trailing your stop loss higher. This will help you close your that particular trade in profit.
  4. Dont Get Victim Of Scams: The rise of internet is a bane in this matter. You must be getting a lot of SMSs that this an insider companys call and that it will keep hitting circuits. Never fell prey to such cons otherwise this will result in all your money being washed away in market.

These are some of the basic things which an investor should know before even entering the market only then he/she will be able to trade wisely.