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Before you trade Indian stocks, you must learn
how to trade shares.
To trade Indian shares these days, you don't need to
visit the crowded investment broker's office anymore. You can
buy and sell shares online from the comfort of
your home at the click of a mouse. But like all
speculative trades, you need to learn the basics
of share trading before picking up the strategies
and putting them to use. As you have seen how the
stock market can behave during crunch time leading
to a wide range of economic woes for the average
American, it would be better to pick up the ropes
slowly. Basics of share trading can be learnt from
several online resources that provide hands-on
help and suggestions. But the very basic tactic is
to buy low and sell at a higher price when you are
satisfied of getting a reasonable return on your
investment. You can also go the other way round by
short selling at a higher price to buy again when
the price dips.
Types of share trading in India
There are two ways to types of stock trading. You
can day trade or buy stocks at a lower price and
wait for days, weeks or months for them to go up
in value when you can sell. Day trading is like
hopping on to a running bus and then getting off
midway. You can buy any time of the day during a
rally that could be an upward or downward trend
and then square off during the day. You cannot do
it with a host of stocks, but some selected stocks
that you can study for some time to get their
tendencies and movements. Once you start studying
a stock, you would more or less be able to predict
the highs and lows as well as the support prices
that they can hold on to during trends. Each stock
has support prices at different levels as the
price goes up and down. Once the support price
breaks, a rally could come up any time and it
could take the price of the stock up or down. When
you learn about share trading, you would be able
to identify the support prices and then take
decisions right away. If you can spot trends
early, you stand to gain as chances of making
profits usually go up when you can strike a deal
early. Thus the idea is to trade the Indian share
market cautiously without taking too much risk and
the best way to do is by first first learning how
to trade the Indian share market. Once you take a
good share market course, then you should trade
India stocks online using a good trading software
and must demand a trading demo to practice your
trades before you start putting real trades live
in the India stock market, through India stock
exchange, like: NSE - National Stock exchange
(NIFTY futures are traded here) & BSE - Bombay
Stock Exchange (SENSEX investment can be done
here).
Put stops to cut losses - A good trading strategy
Poor decisions can break your bank & your
reflexes have to be very quick. You have to think
on your feet as the markets could turn volatile.
Although chances of making money are much more
during volatile trading sessions, you also risk
losing a lot of money if you are not careful.
Primarily, the advantage of being able to trade in
shares online is that you can program your
purchase decisions & let the computer do the
rest for you. There is advanced software available
that can let you put stops and complete trades
when the machine is off as well as when the
machine is on. Learning share trading is
incomplete if you ignore the importance of putting
stop losses when you trade. It is usually helpful
for day trades as the rallies happen quickly and
chances of reversals are also common. If the price
of a stock is $3.60 early during the day when the
trading session begins, you may want to buy if
there is an upward trend. You could buy it at the
price if you are lucky hoping that it would go up.
To prevent your losses from mounting, you could
put a stop at $3.55 or $3.50 and let the machine
do the rest. If the price falls, you don't lose
more than 0.05 or 0.10 cents per stock as a severe
downtrend taking the price to perhaps $3.25.
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