5 Secrets of Trading in Online Stocks that you should know
5 Secrets of Trading in Online Stocks that you should know

5 Secrets of Online Trading you Should Know

Being an investor in the stock market, you make your bread and butter from buying and selling stocks. While the market has infinite complexities, put in the simplest terms, the goal of investors is to buy low, sell high, and make a profit through the difference between the two. One could argue however, that a majority of the tasks of being a trader or investor, is done outside of buying and selling stocks; more specifically, in research. From technical charts to online trading strategies, investors and traders spend a good amount of time researching a stock, before they begin buying and selling. In this article, we will break down 5 stock trading secrets to apply to your online trading strategies.

1. Trend lines

This tip is especially helpful if you are relatively new to the stock market and are looking for online trading strategies to navigate the market. A trendline indicates how a stock has been performing historically. On a chart, these trend lines can be charted in many forms, a prominent one being the moving day average. Generally, a 200-day moving average is used to establish a long term trend in a stock, and you can do down as far as 50 or 20 day averages. While experienced investors might look to take a trade against the trend if they see potential, a safe stock trading secret is to try and trade along the trend line.

2. Research

As mentioned before, research is an important secret of investing that is often overlooked by those enamoured by the thrill of buying and selling. Before you look to buy a stock, one could benefit from researching the stock in depth. This is known broadly as technical and fundamental analysis. While researching a stock, fundamental analysis plays a bigger role. One can look at a number of indicators such as the P/E (price to earnings) ratio, the management of the company, the promoter and how its books have performed historically.

3. Don’t bet it all

One of the things most essential to a trader, is the ability to keep trading. If they run out of funds, this is no longer possible. Another stock trading secret that you will find while looking into secrets of investing, is to make sure your investment in any given trade does not amount to a significant percentage of your fund pool. This way, even if you lose a trade, you have not compromised all your funds and can continue trading.

4. Keep surplus funds.

A trader can never know when they can come across what they believe to be the next multibagger, or a stock that they see great potential in. If you find yourself in this situation, making sure that you always have a certain amount of excess funds will make sure you are able to capitalize on opportunities when they present themselves, without missing out.

5. Value time

Another important day trading and stock trading secret is to acknowledge that we are all working at the behest of the clock. While you are day trading, time is of paramount importance, especially since the digital stock market updates in real-time, making it ever-changing. Valuing time and ensuring you make swift (and calculated) moves in the market could be a good addition to your list of online trading strategies.

Conclusion

Online stock trading and day trading has the potential to be lucrative endeavours provided you proceed with caution and do your research. This article has broken down 5 secrets of investing and online trading strategies.  The stock market, however, is a much more complex entity. Before you rush into a trade, ensure you do your bit of thorough research first.

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