The right calculation for effective trading
For one who loves trading in the stock market, there are many aspects that he must know and keep on changing the trading pattern accordingly. The most important part of the trading is research and complete information about a particular company which can lead to the variance in share prices on the exchange. The trader can know this with the help of technical analysis and reading of chart as well as checking the information from various sources in the market. Such information can help him create own strategy and make the right move with the change of prices and trend.



The trading:

One must know about the factors that can bring in the variation in the prices of the company shares. There is also algorithmic trading possible if the process of a company is continuous and regular on the basis of which one can know the variance to a certain percentage in the share prices in a certain time frame which can help him hit the transaction at the right moment. Such trading falls under the category of calculative risk, and hence it is much important to trade at the right time taking a moderate risk and deploying more of the capital.

The accounts:

In this market to have trading, as per the authorities, there must be a trading account with every trader. The buying and selling of the shares on the exchange are possible only in this account. There are various segments such as cash and derivatives where one can trade and earn good profit in a short as well as long run. The risk level also varies with the time frame and hence the trades with long-term will have low to moderate risk while for short-term trade there will be more risk. It depends on the trader for which trade he wants to go for.

The segments:

If the market is seen from a trader’s point of view, there are various options in the form of segments where the trader can trade and make a profit. In every segment, the profit varies, and same is the case about the investment and risk factors as well as time for making the profit. There are various options such as cash and derivative segments where the trader can trade. In the cash segment, he can trade in the areas of intraday or delivery. In the intraday, the result of profit or loss for the day is instantly available as soon as the session is over while in the delivery based trading it may take considerable time.

In the derivatives also one can go for the trading in futures or options where the contracts for different time frames are available with different rates and expiry dates. In this segment the chances of making profits are high but at the same time the investment is also high, and the risk also increases. The trader must keep the date of expiry in mind and create the position accordingly so that before the expiry he can either make a profit or create a new position.

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