Trading in any financial markets lets you encounter many trading strategies that have been developed over the years. These are considered famous with several traders, both beginners and the experienced lot. What you may also discover is that you may be successful with a specific strategy and your fellow-traders may find that strategy quite useless. How to start trading and your achievement in making good trades is solely dependent on you as an individual trader.
Trading is as individualistic an activity and an experience as your distinct genetic make-up. Hence, no two traders can be alike as no two individuals are the same. When you open a trading account to embark on your forthcoming trading endeavour, you have to think of many factors that will ultimately determine the trading strategy you select. For instance, the kind of personality you have, your resources, and your lifestyle may have an impact on the choice of strategy. However, there are some general trading tactics you can use, and adapt them to your own way of trading.
An online trading account gets you off to the right start, but employing a common strategy takes you further. The most frequently used strategy in trading is based on press releases and the latest news of the markets. Expectations evolve after and before every press release that a company itself may put out there, or any piece of news regarding a particular stock that is published. With digital media acting faster than the speed of light, news travels fast, and many traders base their next purchase or sale according to what they see or hear on the news.
This strategy relies on conducting trades towards the close of a trading day. Such a strategy engages traders in trading when they realise that stock prices are going to close or ‘settle’. Such a strategy involves some study on the trader’s part, comparing price action of the day prior to the present one. As such, traders may speculate on the direction of price movements. Additionally, traders may establish orders based on limits or stop-loss, simply to avoid any risk that may be imminent overnight. Studying charts at times when markets open and close is a good way to carry out this strategy.
While you open a trading account itself, you may come across common terms and most of these include the strategies used by traders all over the globe. ‘Swing trading’ is a term that you will almost always come across. This refers to trading on both sides of the shifts in financial markets. What swing traders aim to do is to buy a stock when they think the markets will surge, and sell when they feel markets will fall. Therefore, oscillations in the general financial markets determine aspects of swing trading. Swing trading may seem simple enough, but traders do study charts and have a somewhat technical approach to trading. Swing trading makes the use of analysis of individual movements in the perspective of the arger market picture.
The way to set your course for investment is to first open a Demat account with a proficient broker like Motilal Oswal (MO). Once you do this, you can link it to a trading account and start trading after you have taken advantage of the educational resources available to you at Motilal Oswal.
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