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The Best Ever Tips for Investors and Traders in the Stock Market

By Cody Subscribe to RSS | January 10th 2012 | Views:

If you are thinking of reaping good returns for your savings, then Share market is one of the best investment options for you. But one reason why people are not keenly inclined on investing in the stock market is because of the high risk that it carries. If any of your friends or neighbors had tried their hands at share trading, they would have told you about their dreadful experience; I'm pretty sure most of them would have lost their money. And don't be surprised that I got it right because I have loads of experience in this field and just like your friends I was one of those who had gotten their investment wiped off within weeks (though things have changed now). The only reason why people lose their money is only due to the lack of knowledge. However, with my experience let me give you some useful tips with which, I believe, you can make profits consistently. Before that let me tell that if you are already a trader and facing loses repeatedly, please stop trading immediately. Go through the rest of this write up and then you will know the reason for what I actually mean to say.

First, select a set of four or five volatile stocks that are a part of the index and monitor their price movements every day. If you are an investor, I would suggest you learn the fundamental analysis of stocks. This includes market capitalization, book value, PE ratio, Industry PE ratio etc. By learning the fundamental analysis, you get to know about the potentials of each company. Also, monitor their order books and pay close attention to all the corporate announcements.

If you are a trader, I would suggest you to learn the intricacies of technical analysis. Some of the important and dependable indicators that I use to carry out my trades are Bollinger Band, Relative Strength Index (RSI), Stochastic (fast and slow), and Moving Average (simple, exponential, weighted). Get familiar with all these indicators and try out various parameters. You have all these indicators in your trading terminal (trading software). There is no standard parameter for these indicators as such. Successful traders use their own parameters and I'd suggest you settle with the ones that you find suits your trading style. Since time is of paramount importance in share trading, it would be better to go for any of the high-speed Internet connections such as Verizon FiOS Internet. If you are new to share trading, then I'd suggest you to seek the guidance of an experienced trader or get to know the basics of these indicators from your stock broker. One more thing, I would advice traders to avoid Intraday trading completely; you can do intraday trading only if there is a sudden news flow or any major announcement from any of the corporate. Otherwise, it's best to stay away from it because this is how 90% of the traders lose their money. However, if you are a kind of trader who feels there is no tomorrow in the stock market and prefer trading in the future and options segment, then its better you trade with a short term view of at least three to four days. I prefer taking fresh positions by monitoring the stock price only on closing basis.

•As a general rule, I would advise investors and traders to buy when the stock is low and sell when the stock is higher.

•Always trade with the trend. That is, trade strictly with the direction of the market. Go long on stocks if the index is in green (positive) and go short if the index is in red (negative).

•I would recommend new traders and investors to attend share trading classes and learn the basics of share trading. Then, start your investment with a low margin. Remember, you are only experimenting and you don't have to put all your money and be piqued after it's wiped off. Trade with a low margin until you get the real confidence that you can win in the stock market. Once you start winning, then there is no stopping for profits.

Cody - About Author:
Cody is a freelance writer and likes to write on all kinds of topics ranging from entertainment and technology to sports and games. He specializes on topics related to Investment and finance. He trades with his laptop that is powered by a high-speed Internet conection provided byVerizon FiOS Internet.

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