Day trading
Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day. Traders that participate in day trading are called active traders or day traders.
Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures.
Day trading used to be the preserve of financial firms and professional investors and speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, with the advent of electronic trading and margin trading, day trading has become increasingly popular among casual, at-home traders.
Characteristics
Trade frequency
Although collectively called day trading, there are many styles within day trading. Scalping is an intra-day technique that usually has the bob holding a position for a few minutes. Shaving is a method which allows the trader to jump ahead by a tenth of a cent, and a full round trip (a buy and a sell order) is often completed in under one second. Instead of bidding $10.20 per share, the scalper will jump the bid at $10.201, thus becoming the best bid and therefore the first in line to be able to purchase the stock. When the best "Offer" is $10.21, the shaver will again jump first in line and sell a tenth of a cent cheaper at $10.209 for a profit of 0.008 of a dollar. The profits add up when using 10,000 share lots each time and the combined earnings from Rebates (read below) for creating liquidity. A day trader is actively searching for potential trading setups (that is, any stock or other financial instruments that, in the judgment of the day trader, is in a tension state, ready to accelerate in price in either direction, that when traded well has a potential for a substantial profit). The number of trades you can make per day are almost unlimited, as are the profits and losses.
Some day traders focus on very short-term trading within the trading day, in which a trade may last just a few minutes. Day traders may buy and sell many times in a trading day and may receive trading fee discounts from their broker for this trading volume.
Some day traders focus only on price momentum, others on technical patterns, and still others on an unlimited number of strategies they feel can be profitable.
Most day traders exit positions before the market closes to avoid unmanageable risks—negative price gaps (differences between the previous day's close and the next day's open bull price) at the open—overnight price movements against the position held. Other traders believe they should let the profits run, so it is acceptable to stay with a position after the market closes.[1]
Day traders sometimes borrow money to trade. This is called margin trading. Since margin interests are typically only charged on overnight balances, the trader pays no fees for the margin benefit, though still running the risk of a Margin call. The margin interest rate is usually based on the Broker's call.
Profit and risks
Because of the nature of financial leverage and the rapid returns that are possible, day trading can be either extremely profitable or extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses. Some day traders manage to earn millions per year solely by day trading.[2]
Because of the high profits (and losses) that day trading makes possible, these traders are sometimes portrayed as "bandits" or "gamblers" by other investors. Some individuals, however, make a consistent living from day trading.
Nevertheless day trading can be very risky, especially if any of the following is present while trading:
• trading a loser's game/system rather than a game that's at least winnable,
• trading with poor discipline (ignoring your own day trading strategy, tactics, rules),
• inadequate risk capital with the accompanying excess stress of having to "survive",
• incompetent money management (i.e. executing trades poorly).[3]
.
Techniques
The following are several basic strategies by which day traders attempt to make profits. Besides these, some day traders also use contrarian (reverse) strategies (more commonly seen in algorithmic trading) to trade specifically against irrational behavior from day traders using these approaches.
Some of these approaches require shorting stocks instead of buying them normally: the trader borrows stock from his broker and sells the borrowed stock, hoping that the price will fall and he will be able to purchase the shares at a lower price. There are several technical problems with short sales --- the broker may not have shares to lend in a specific issue, some short sales can only be made if the stock price or bid has just risen (known as an "uptick"), and the broker can call for the return of its shares at any time. Some of these restrictions (in particular the uptick rule) don't apply to trades of stocks that are actually shares of an exchange-traded fund (ETF).
Trend followingTrend following, a strategy used in all trading time-frames, assumes that financial instruments which have been rising steadily will continue to rise, and vice versa with falling. The trend follower buys an instrument which has been rising, or short sells a falling one, Contrarian investingContrarian investing is a market timing strategy used in all trading time-frames. It assumes that financial instruments which have been rising steadily will reverse and start to fall, and vice versa with falling. The contrarian trader buys an instrument which has been falling, or short-sells a rising one, in the expectation that the trend will change.
Range trading
Range trading, or range-bound trading, is a trading style in which stocks are watched that have either been rising off a support price or falling off a resistance price. That is, every time the stock hits a high, it falls back to the low, and vice versa. Such a stock is said to be "trading in a range", which is the opposite of trending.[5] The range trader therefore buys the stock at or near the low price, and sells (and possibly short sells) at the high. A related approach to range trading is looking for moves outside of an established range, called a breakout (price moves up) or a breakdown (price moves down), and assume that once the range has been broken prices will continue in that direction for some time.
Scalping
Scalping was originally referred to as spread trading. Scalping is a trading style where small price gaps created by the bid-ask spread are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds.
Scalping highly liquid instruments for off the floor day traders involves taking quick profits while minimizing risk (loss exposure). It applies technical analysis concepts such as over/under-bought, support and resistance zones as well as trendline, trading channel to enter the market at key points and take quick profits from small moves. The basic idea of scalping is to exploit the inefficiency of the market when volatility increases and the trading range expands.
Rebate trading
Rebate trading is an equity trading style that uses ECN rebates as a primary source of profit and revenue. Most ECNs charge commissions to customers who want to have their orders filled immediately at the best prices available, but the ECNs pay commissions to buyers or sellers who "add liquidity" by placing limit orders that create "market-making" in a security. Rebate traders seek to make money from these rebates and will usually maximize their returns by trading low priced, high volume stocks. This enables them to trade more shares and contribute more liquidity with a set amount of capital, while limiting the risk that they will not be able to exit a position in the stock. Rebate trading was pioneered at Datek Online and Domestic Securities. Omar Amanat founded Tradescape and the rebate trading group at Tradescape helped to contribute to a $280 million buyout from online trading giant E*Trade.
News playing
News playing is primarily the realm of the day trader. The basic strategy is to buy a stock which has just announced good news, or short sell on bad news. Such events provide enormous volatility in a stock and therefore the greatest chance for quick profits (or losses). Determining whether news is "good" or "bad" must be determined by the price action of the stock, because the market reaction may not match the tone of the news itself. The most common cause for this is when rumors or estimates of the event (like those issued by market and industry analysts) were already circulated before the official release, and prices have already moved in anticipation---the news is already priced in the stock.
Price action
Keeping things simple can also be an effective methodology when it comes to trading. There are groups of traders known as "Price Action Traders" who are a form of technical traders that rely on technical analysis but do not rely on conventional indicators to point them in the direction of a trade or not. These traders rely on a combination of price movement, chart patterns, volume, and other raw market data to gauge whether or not they should take a trade. This is seen as a "simplistic" and "minimalist" approach to trading but is not by any means easier than any other trading methodology. It requires a sound background in understanding how markets work and the core principles within a market, but the good thing about this type of methodology is it will work in virtually any market that exists (Stocks, Forex, Futures, Gold, Oil, etc.).
Artificial intelligence
An estimated one third of stock trades in 2005 in United States were generated by automatic algorithms. The increased use of algorithms and quantitative techniques have led to more
Spread
The numerical difference between the bid and ask prices is referred to as the bid-ask spread. Most worldwide markets operate on a bid-ask-based system.
The ask prices are immediate execution (market) prices for quick buyers (ask takers) while bid prices are for quick sellers (bid takers). If a trade is executed at quoted prices, closing the trade immediately without queuing would not cause a loss because the bid price is always less than the ask price at any point in time.
The bid-ask spread is two sides of the same coin. The spread can be viewed as trading bonuses or costs according to different parties and different strategies. On one hand, traders who do NOT wish to queue their order, instead paying the market price, pay the spreads (costs). On the other hand, traders who wish to queue and wait for execution receive the spreads (bonuses). Some day trading strategies attempt to capture the spread as additional, or even the only, profits for successful trades.
Market data
Market data is necessary for day traders, rather than using the delayed (by anything from 10 to 60 minutes, per exchange rules[7]) market data that is available for free. A real-time data feed requires paying fees to the respective stock exchanges, usually combined with the broker's charges; these fees are usually very low compared to the other costs of trading. The fees may be waived for promotional purposes or for customers meeting a minimum monthly volume of trades. Even a moderately active day trader can expect to meet these requirements, making the basic data feed essentially "free."
In addition to the raw market data, some traders purchase more advanced data feeds that include historical data and features such as scanning large numbers of stocks in the live market for unusual activity. Complicated analysis and charting software are other popular additions. These types of systems can cost from tens to hundreds of dollars per month to access.
Regulations and restrictions
Day trading is considered a risky trading style, and regulations require brokerage firms to ask whether the clients understand the risks of day trading and whether they have prior trading experience before entering the market.
Saturday, May 29, 2010
Wednesday, May 26, 2010
My mistakes in the Market.
My mistakes in the Market.
This is probably the best part of this long article cum tutorial because it comes straight from my hands-on experience. I will list them in the order of their importance. I used to wonder why even after the doctor warned an individual about his level of liquor intake, he continues to drink? The person is aware of the dangers and he tries to stop himaself from abusing his system; but invariably fails. Lack of will power to blame I suppose.
In much the same way, we are all human beings and it will not be easy to have such will power that is needed to take the right path. Human beings are easily overcome with emotions like greed and make mistakes.
However it is those individuals with clarity of thought, perseverance, single minded focus, and those who are not easily overcome with emotions no matter what happens around them, who eventually succeed.
Hence my advise is, follow the advice from reliable sources and do learn from your mistakes.
Anyway, onto my mistakes - I am a bit embarrassed but hope you benefit from my revelations.
1. Having invested all my savings in equity.
My first mistake was putting all my savings in equity. It sent shivers down my spine at one point when market was crashing relentlessly in a free fall. When the market goes down and if some part of your savings is safe in the bank account, it will be a great relief that you haven't put all eggs in one basket.
When the crash is strong and you are making loss, it is hard to even sell your shares. Now, the thing is whether you need money at all in hand. If you don't, your battered shares will eventually recover (provided your purchase was of good companies). However it is a deadly thing to do by putting all your money in equity alone. When it is shooting up, you would feel vindicated. However share market is such that it can go down with the same speed.
Hence the advice is "never invest all your money in equity". Some advisors say put only 30%. That may be the wisest thing to do. However a 40 or 50% may not be a bad idea depending upon your risk appetite.
2. Selling.
Why should one sell? when one scrip is not moving, or when a company performs badly in two quarters in a row?.
The right answer should be the latter but most people follow the former. Like them, I often made the mistake of selling and going after a new scrip that's 'hot'. By the time I sell, the cold one becomes hot and the hot one becomes cold. Because by the time you read a news item that makes sense enough to go after a scrip, or hear a hot tip and follow the scrip, it would have very often, lost all its steam and stopped appreciating.
Now, I have almost fully learnt to trust and stay with my scrip, my company, no matter what buzz goes around. I do move to a new scrip but much more cautiously and prudently than I used to. An advice to my readers: If one scrip is so compelling and forcing you to sell your holding, do that selling slowly (over a week or a month) by selling part by part. Because you never know! The moment you sell your favourite one, it could start shooting up. That's the market; no one knows that a storm is brewing in your own tea cup. But people often look into others tea cup's. Stop doing that, please, for your own good.
Also, remember the broker commission and other associated expenses for the selling and buying transaction. No matter whether you made money or not, through your transaction of buying and selling, your broker makes money and the government through TAX makes money too.
Look at the one year charts through www.nepalstock.com. You can see that there are many good scrips rise substantially once in an year and for a brief period. How would you possibly catch that rise even if you stayed for 11 months; the ascent may come in the 12th month. There are also those which climb incessantly upwards and for longer periods, but how would you know? Also, there is nothing like it - what goes up will come down.
So learn to stay, not sell. Selling is surely not important. One word about buying - follow that 'part by part' policy while buying scrips too. A scrip wont disappear but your money will.
3. Panicking and booking loss.
I trusted my selections of stocks. I studied them however briefly, before I invested, I decided never to sell for a loss. Yet when I saw the heavy crash in May 2006, I started selling and booking loss. By July, Market was undergoing a nice recovery. Yet in May, I failed to pursue my decision 'never to sell for a loss'.
4. Not having chosen only the best.
As a beginner, I must have chosen only the fundamentally strong companies. Only few companies I have chosen, is performing poorly today. However I haven't restricted myself only to the fundamentally strong companies. For example STC, , NABIL, EBL, to name a few.
Problem is that in a bull market almost all good companies will be on an uptrend. Everything will look good. It is when a serious crash starts, many that went up fastest are likely to loose out first. Also, their recovery is very likely to be slow. However the blue-chip companies such as STC or NABIL rebound faster and enjoy a good level of insulation from a crash.
This is probably the best part of this long article cum tutorial because it comes straight from my hands-on experience. I will list them in the order of their importance. I used to wonder why even after the doctor warned an individual about his level of liquor intake, he continues to drink? The person is aware of the dangers and he tries to stop himaself from abusing his system; but invariably fails. Lack of will power to blame I suppose.
In much the same way, we are all human beings and it will not be easy to have such will power that is needed to take the right path. Human beings are easily overcome with emotions like greed and make mistakes.
However it is those individuals with clarity of thought, perseverance, single minded focus, and those who are not easily overcome with emotions no matter what happens around them, who eventually succeed.
Hence my advise is, follow the advice from reliable sources and do learn from your mistakes.
Anyway, onto my mistakes - I am a bit embarrassed but hope you benefit from my revelations.
1. Having invested all my savings in equity.
My first mistake was putting all my savings in equity. It sent shivers down my spine at one point when market was crashing relentlessly in a free fall. When the market goes down and if some part of your savings is safe in the bank account, it will be a great relief that you haven't put all eggs in one basket.
When the crash is strong and you are making loss, it is hard to even sell your shares. Now, the thing is whether you need money at all in hand. If you don't, your battered shares will eventually recover (provided your purchase was of good companies). However it is a deadly thing to do by putting all your money in equity alone. When it is shooting up, you would feel vindicated. However share market is such that it can go down with the same speed.
Hence the advice is "never invest all your money in equity". Some advisors say put only 30%. That may be the wisest thing to do. However a 40 or 50% may not be a bad idea depending upon your risk appetite.
2. Selling.
Why should one sell? when one scrip is not moving, or when a company performs badly in two quarters in a row?.
The right answer should be the latter but most people follow the former. Like them, I often made the mistake of selling and going after a new scrip that's 'hot'. By the time I sell, the cold one becomes hot and the hot one becomes cold. Because by the time you read a news item that makes sense enough to go after a scrip, or hear a hot tip and follow the scrip, it would have very often, lost all its steam and stopped appreciating.
Now, I have almost fully learnt to trust and stay with my scrip, my company, no matter what buzz goes around. I do move to a new scrip but much more cautiously and prudently than I used to. An advice to my readers: If one scrip is so compelling and forcing you to sell your holding, do that selling slowly (over a week or a month) by selling part by part. Because you never know! The moment you sell your favourite one, it could start shooting up. That's the market; no one knows that a storm is brewing in your own tea cup. But people often look into others tea cup's. Stop doing that, please, for your own good.
Also, remember the broker commission and other associated expenses for the selling and buying transaction. No matter whether you made money or not, through your transaction of buying and selling, your broker makes money and the government through TAX makes money too.
Look at the one year charts through www.nepalstock.com. You can see that there are many good scrips rise substantially once in an year and for a brief period. How would you possibly catch that rise even if you stayed for 11 months; the ascent may come in the 12th month. There are also those which climb incessantly upwards and for longer periods, but how would you know? Also, there is nothing like it - what goes up will come down.
So learn to stay, not sell. Selling is surely not important. One word about buying - follow that 'part by part' policy while buying scrips too. A scrip wont disappear but your money will.
3. Panicking and booking loss.
I trusted my selections of stocks. I studied them however briefly, before I invested, I decided never to sell for a loss. Yet when I saw the heavy crash in May 2006, I started selling and booking loss. By July, Market was undergoing a nice recovery. Yet in May, I failed to pursue my decision 'never to sell for a loss'.
4. Not having chosen only the best.
As a beginner, I must have chosen only the fundamentally strong companies. Only few companies I have chosen, is performing poorly today. However I haven't restricted myself only to the fundamentally strong companies. For example STC, , NABIL, EBL, to name a few.
Problem is that in a bull market almost all good companies will be on an uptrend. Everything will look good. It is when a serious crash starts, many that went up fastest are likely to loose out first. Also, their recovery is very likely to be slow. However the blue-chip companies such as STC or NABIL rebound faster and enjoy a good level of insulation from a crash.
Some important principles.
Some important principles.
Share market in the long term is known to surpass any other asset class in terms of the profits that can be made. However no doubt that this is one of the riskiest method of making money.
Never invest all your money in equities:
Never invest the money you have saved for your daughters marriage which may be coming up in the next one and half years because someone said that in one and half years, you can double that money in equities.
In one and a half years it could as well become half the value of the capital. Hence keep apart an amount for investing into the equity market. That should never be money that you need for an emergency or other important matters.
Money that you have kept aside for equity investment must be purely an amount that can be forgotten for a longer period of time because making money in the market does not happen overnight.
Major crashes are opportunities to buy:
Normally when there is a sale in the supermarket, people run to buy as much as they can as they are getting it cheap. However when there is a stock market crash and when your favourite companies shares are available at rock bottom prices (assuming nothing has affected companies business prospects), that's the best time to buy them in fact. Normally when everything is positive and the market is in an uptrend, people go and buy and when it has crashed, people sell their stocks and run for cover. Opposite is the strategy to adopt.
Greedy when others are fearful, fearful when others are greedy.
This is one of the principles experts proclaim. That's when others are fearful (a time when market is down), get greedy because you get shares cheap. As mentioned previously, generally when shares are climbing up and NEPSE conquering new highs, all flock to buy. However When the shares are climbing down and the market is crashing people sell and run for cover.
Only thing you should try to ensure in such circumstances is that crash is total and that you have seen the bottom. It is however difficult to ensure this. However when your favourite share is available at good prices even if it is not the lowest possible, that's good buy.
Share market in the long term is known to surpass any other asset class in terms of the profits that can be made. However no doubt that this is one of the riskiest method of making money.
Never invest all your money in equities:
Never invest the money you have saved for your daughters marriage which may be coming up in the next one and half years because someone said that in one and half years, you can double that money in equities.
In one and a half years it could as well become half the value of the capital. Hence keep apart an amount for investing into the equity market. That should never be money that you need for an emergency or other important matters.
Money that you have kept aside for equity investment must be purely an amount that can be forgotten for a longer period of time because making money in the market does not happen overnight.
Major crashes are opportunities to buy:
Normally when there is a sale in the supermarket, people run to buy as much as they can as they are getting it cheap. However when there is a stock market crash and when your favourite companies shares are available at rock bottom prices (assuming nothing has affected companies business prospects), that's the best time to buy them in fact. Normally when everything is positive and the market is in an uptrend, people go and buy and when it has crashed, people sell their stocks and run for cover. Opposite is the strategy to adopt.
Greedy when others are fearful, fearful when others are greedy.
This is one of the principles experts proclaim. That's when others are fearful (a time when market is down), get greedy because you get shares cheap. As mentioned previously, generally when shares are climbing up and NEPSE conquering new highs, all flock to buy. However When the shares are climbing down and the market is crashing people sell and run for cover.
Only thing you should try to ensure in such circumstances is that crash is total and that you have seen the bottom. It is however difficult to ensure this. However when your favourite share is available at good prices even if it is not the lowest possible, that's good buy.
Tuesday, May 25, 2010
New IPO in market
New ipo in market.
Two Banking company Recently announce to issue Their IPO.
1.Surya darshan finance from jestha 20-24.Isue manager is NMB bank.
2.Western Development bank from jestha 10-21.Issue manager is NIDC capital market.
Two Banking company Recently announce to issue Their IPO.
1.Surya darshan finance from jestha 20-24.Isue manager is NMB bank.
2.Western Development bank from jestha 10-21.Issue manager is NIDC capital market.
Monday, May 24, 2010
Swing Trading Tips to Help You Do Good in Swing Stock Trading
Swing Trading Tips to Help You Do Good in Swing Stock Trading
Almost all the trader and investors who regularly use internet are well aware about the term "swing stock trading". If you fall amongst these day traders or the long-term traders then you are a Swing trader. A swing trader holds the stock or a commodity for few days which can't exceed than a few weeks. In a cultural and traditional point of view, Swing stock trading is considered to be a low risk speculation. There are many experts who will tell you that Swing trading is all about working in a static stock market where in the prices never vacillates.
There are some exciting and useful tips and ideas and plans in order to adjust the swing stock trading to make more profits. A regular parson knew that the stock market is like a playground for the big investors. Always keep in mind that you should invest that much money that you can afford to lose. Never make any mistake about it. About two-five thousand bugs are enough to begin with the swing trading in the stock market. Look for the following combination of the two ideas:
PENNY STOCKS combined with CANDLESTICK CHARTING!!
There at times the influential investors or traders use to pump up the stock or commodity, then sell tit for bulk of profits and then throw it out of the list of the stocks. It usually takes place in the popular scam known as "pump and dump".
If you will have a significant and material look in to the small companies then you will notice that these companies are loyal and are terrifically potential in their work. This way you are sure that the penny stocks are the right ways to go for. In this article there are few penny sectors described with which you can begin your journey in the stock market as a trader or an investor.
The "Nano Technology" sector is the correct place to begin with. You can find several Nano companies that will provide you with financial back up and has a collection of terrific growth techniques. To keep the excitement on the full go, search out for the stocks at your own. You will have fun in researching for all the stock details from the Nano companies.
To find the jewels of stock market, that is the nano companies, you can make use of "Candlestick Charting". You can track different stocks through candlestick charting. The fundamentals and the basics are really important if you have been planning to invest on long-term notes for your retirement purposes. For your swing stock trading, you just need to know about the technicals and that is it. If you will follow the particular stock or commodity for few days you can taste the flavor of an incredible hike in the stock prices. It doesn't happen at all times. It does occur many times than you barely think. You just need to get the understanding of where to look for.
Therefore, swing stock trading is all about right hit at the right time. This is all you need to become a millionaire in the stock market through swing trading.....
Almost all the trader and investors who regularly use internet are well aware about the term "swing stock trading". If you fall amongst these day traders or the long-term traders then you are a Swing trader. A swing trader holds the stock or a commodity for few days which can't exceed than a few weeks. In a cultural and traditional point of view, Swing stock trading is considered to be a low risk speculation. There are many experts who will tell you that Swing trading is all about working in a static stock market where in the prices never vacillates.
There are some exciting and useful tips and ideas and plans in order to adjust the swing stock trading to make more profits. A regular parson knew that the stock market is like a playground for the big investors. Always keep in mind that you should invest that much money that you can afford to lose. Never make any mistake about it. About two-five thousand bugs are enough to begin with the swing trading in the stock market. Look for the following combination of the two ideas:
PENNY STOCKS combined with CANDLESTICK CHARTING!!
There at times the influential investors or traders use to pump up the stock or commodity, then sell tit for bulk of profits and then throw it out of the list of the stocks. It usually takes place in the popular scam known as "pump and dump".
If you will have a significant and material look in to the small companies then you will notice that these companies are loyal and are terrifically potential in their work. This way you are sure that the penny stocks are the right ways to go for. In this article there are few penny sectors described with which you can begin your journey in the stock market as a trader or an investor.
The "Nano Technology" sector is the correct place to begin with. You can find several Nano companies that will provide you with financial back up and has a collection of terrific growth techniques. To keep the excitement on the full go, search out for the stocks at your own. You will have fun in researching for all the stock details from the Nano companies.
To find the jewels of stock market, that is the nano companies, you can make use of "Candlestick Charting". You can track different stocks through candlestick charting. The fundamentals and the basics are really important if you have been planning to invest on long-term notes for your retirement purposes. For your swing stock trading, you just need to know about the technicals and that is it. If you will follow the particular stock or commodity for few days you can taste the flavor of an incredible hike in the stock prices. It doesn't happen at all times. It does occur many times than you barely think. You just need to get the understanding of where to look for.
Therefore, swing stock trading is all about right hit at the right time. This is all you need to become a millionaire in the stock market through swing trading.....
Swing Trading - Are You Investing Intelligently?
Swing Trading - Are You Investing Intelligently?
Often the stock investing is sentimental in nature. It is not good to be emotional and sentimental in this respect. The investing would be successful only if it leaves the feelings and sentiments behind. Otherwise it would lead to mistakes and the opportunities you get would be lost. Swing trading is more of an emotional value. It is very significant to follow certain rules and regulations in order to remain objective and to taste success. Invest through Swing trading in an intelligent way from the following four rules:
- Expect Losing Streaks when doing Swing Trading
In a full view Swing trading is a long term investment scheme. In case of short-term investment scheme the risk is high as you try to undertake in order to catch profits with the use of "swing" in the stock assesses. In this career or profession, all the swing traders are at the edge of suffering from loss of streaks at one or the other point of time in their work. This can prove to be exhausting for all those who are new in this line of Swing trading. The traders should expect the losing streaks because this way they would be emotionally and economically prepared in advance.
- Keep Losses as Small as Possible
Every business and every profession works at par to keep their losses as small as possible and increase their profits as much as possible. Therefore, Swing trading also aims at the same rule. It can be done with ease, if one wants to. If the investment would be high and good, it will minimize the losses and the person would do better in keeping the losing streaks at minimal level.
- Never Book Too Long or Too Short
Remember the simple fundamental, never become too greedy too overcome the loss. In other words, too much greediness in swing trading can lead to a great loss to your pocket. The main thing is that it is about sentiments versus objectiveness. If you talk in terms of sentiments then, it is much easier to sell and then accept the gain, whereas, it is much easier to sell than to accept the loss.
Therefore, the above mentioned is the reason that many investors keep on booking their stocks for shorter period of time to accept the gains or book their stocks for longer period of time as a hope to get a bounce in stocks. A successful and intelligent investor would depend on forbearance, scheme, and education in order to follow the veers and in order to take objective conclusions by leaving greed and sentiments behind.
- Invest With The Trend When Swing Trading
It is the most significant rule to be kept in mind at all stages of swing trading. Always keep trend in mind while investing. Buy the stocks if the trend is optimistic and go for short term stocks if the trend is pessimistic. If you would do the opposite manner it would become easy for you to have hits in your investment. If you would wager at the trend then you might face a great loss, because it is not known when the trend changes.
Follow the simple rules and maximize your profits and minimize your sentimental trading. Try to learn from your previous mistakes and be concentrated and patient and educative and then invest intelligently for good money back......
Often the stock investing is sentimental in nature. It is not good to be emotional and sentimental in this respect. The investing would be successful only if it leaves the feelings and sentiments behind. Otherwise it would lead to mistakes and the opportunities you get would be lost. Swing trading is more of an emotional value. It is very significant to follow certain rules and regulations in order to remain objective and to taste success. Invest through Swing trading in an intelligent way from the following four rules:
- Expect Losing Streaks when doing Swing Trading
In a full view Swing trading is a long term investment scheme. In case of short-term investment scheme the risk is high as you try to undertake in order to catch profits with the use of "swing" in the stock assesses. In this career or profession, all the swing traders are at the edge of suffering from loss of streaks at one or the other point of time in their work. This can prove to be exhausting for all those who are new in this line of Swing trading. The traders should expect the losing streaks because this way they would be emotionally and economically prepared in advance.
- Keep Losses as Small as Possible
Every business and every profession works at par to keep their losses as small as possible and increase their profits as much as possible. Therefore, Swing trading also aims at the same rule. It can be done with ease, if one wants to. If the investment would be high and good, it will minimize the losses and the person would do better in keeping the losing streaks at minimal level.
- Never Book Too Long or Too Short
Remember the simple fundamental, never become too greedy too overcome the loss. In other words, too much greediness in swing trading can lead to a great loss to your pocket. The main thing is that it is about sentiments versus objectiveness. If you talk in terms of sentiments then, it is much easier to sell and then accept the gain, whereas, it is much easier to sell than to accept the loss.
Therefore, the above mentioned is the reason that many investors keep on booking their stocks for shorter period of time to accept the gains or book their stocks for longer period of time as a hope to get a bounce in stocks. A successful and intelligent investor would depend on forbearance, scheme, and education in order to follow the veers and in order to take objective conclusions by leaving greed and sentiments behind.
- Invest With The Trend When Swing Trading
It is the most significant rule to be kept in mind at all stages of swing trading. Always keep trend in mind while investing. Buy the stocks if the trend is optimistic and go for short term stocks if the trend is pessimistic. If you would do the opposite manner it would become easy for you to have hits in your investment. If you would wager at the trend then you might face a great loss, because it is not known when the trend changes.
Follow the simple rules and maximize your profits and minimize your sentimental trading. Try to learn from your previous mistakes and be concentrated and patient and educative and then invest intelligently for good money back......
BASICS ABOUT SWING TRADING
BASICS ABOUT SWING TRADING:
The basic component after this Swing trading is that it is a form or kind which comes and falls between the day trading and trend following. In other words, whenever you take a participation in such an investment plan, there is a huge commodity holding that is going with a flow. In fact the traders or the investors hold themselves on a certain commodity or a stock in Swing trading for a certain time period. The time period may extend from few days to even 2-3 months. It is not assured in the beginning.
DETAILED VIEW:
*The stock or the commodity of the investor is traded on the basis of emotions that are both optimistic and pessimistic.
*Here the investors have to make predictions and planning techniques that gather some or the other kind of stock impulse and this way you will make money on the market flow.
*It is very important to understand that there are two standards, utmost and different markets that survive in the Swing trading that are the bearish (pessimistic) and the bullish (optimistic) markets.
Between these two extreme markets, the investors and traders can anticipate their stock to act unpredictably even in those conditions when the indicators of the market propose that a period of steady value is on the way to occur constantly.
*Market impulse is unpredictable and many times the stocks or the commodities can be extracted in a single focus for a longer period of time. Moreover, fluctuating between the two utmost price efforts is also possible if the psychology of the market and the external causes are also considered in the same way.
WHAT THE INVESTORS DO IN THE SWING TRADING?
All those people who trade in the stock market with Swing trading will go for long term stock holdings in most of the cases because swing trading is an unparalleled position on stock trading. It will also demand of unmeasured patience level of the human beings from the trading point of view. This works at its best when the market has no set direction and is going in a wave form that is sometimes going up for few days and at other time going into the plunge with a discriminating decline without any reason with the passage of time. It demands right amount of patience at the right time.
At most of the times, the swing investors and traders indulge themselves with more than one stock or commodity and trade. This way they pile up their activities around the time period where the time and attempts do reach at the curve.
PROBLEM BEING A SWING TRADER:
You need to make a scheme for your exit on a trade and that also just before the profit time period. In other words, just before the stock or the commodity reaches the peak point. You need to follow a secure tactic that has to be taken by the swing traders. Moreover, it is important to understand that only the experienced traders determine to go for the volatile portion of the investment market.
The basic component after this Swing trading is that it is a form or kind which comes and falls between the day trading and trend following. In other words, whenever you take a participation in such an investment plan, there is a huge commodity holding that is going with a flow. In fact the traders or the investors hold themselves on a certain commodity or a stock in Swing trading for a certain time period. The time period may extend from few days to even 2-3 months. It is not assured in the beginning.
DETAILED VIEW:
*The stock or the commodity of the investor is traded on the basis of emotions that are both optimistic and pessimistic.
*Here the investors have to make predictions and planning techniques that gather some or the other kind of stock impulse and this way you will make money on the market flow.
*It is very important to understand that there are two standards, utmost and different markets that survive in the Swing trading that are the bearish (pessimistic) and the bullish (optimistic) markets.
Between these two extreme markets, the investors and traders can anticipate their stock to act unpredictably even in those conditions when the indicators of the market propose that a period of steady value is on the way to occur constantly.
*Market impulse is unpredictable and many times the stocks or the commodities can be extracted in a single focus for a longer period of time. Moreover, fluctuating between the two utmost price efforts is also possible if the psychology of the market and the external causes are also considered in the same way.
WHAT THE INVESTORS DO IN THE SWING TRADING?
All those people who trade in the stock market with Swing trading will go for long term stock holdings in most of the cases because swing trading is an unparalleled position on stock trading. It will also demand of unmeasured patience level of the human beings from the trading point of view. This works at its best when the market has no set direction and is going in a wave form that is sometimes going up for few days and at other time going into the plunge with a discriminating decline without any reason with the passage of time. It demands right amount of patience at the right time.
At most of the times, the swing investors and traders indulge themselves with more than one stock or commodity and trade. This way they pile up their activities around the time period where the time and attempts do reach at the curve.
PROBLEM BEING A SWING TRADER:
You need to make a scheme for your exit on a trade and that also just before the profit time period. In other words, just before the stock or the commodity reaches the peak point. You need to follow a secure tactic that has to be taken by the swing traders. Moreover, it is important to understand that only the experienced traders determine to go for the volatile portion of the investment market.
Stock Trading - Tips and Tricks For Beginners
Stock Trading - Tips and Tricks For Beginners
There are a number of people who are making a lot of money on Wall Street as compared to any other business or work. Now the question arises as to how can you make profit out of the stock market. If you as a beginner are looking for some specific tutorials or guidelines, which can make you a successful stock market investor, then as such there are no specifications.
The best tick for beginners investing in stocks is to keep a close watch on the market and understand what is going on in particular related to a stock that they wish to invest in. getting to know the basics and sticking to them, doing research on the market conditions every now and then, keenness to take risks. These are a few points that you should keep in mind while trading stocks to become successful.
If you are a beginner then there is no shortage of stockbrokers in the market. But, if you are investing bigger amount then it is better that you have your own trading strategy. For doing this it is better that you start with the basics of stock market and understand how it works.
The capital market consists of both the stock and the bond markets. This is the place where companies and governments heave up the money with security deposits. These deposits are then sold and bought by companies or individuals, which forms the basis of stock trading. It is best for you to try and understand the policies and the profile of a particular company with whom you are interested in investing and this will help you develop your trading strategy.
When trading stocks depending on how much risk you are ready and whether you are able to keep an eye on the value of the moving of shares you can trade in two ways:
1. Daily Basis Trading: In this trading the trader buys and sells stocks on a daily basis and keeps an eye on the fluctuating value of the stocks. And when it is optimum the stocks are sold to get the best price.
2. Delivery Basis Trading: With this the trader buys shares and keeps them in the stock and whenever the conditions are feasible and you are bound to get maximum profit these are sold. This type of investment is suggested for companies that show exceptional results on long-term basis.
When dealing with stocks it is always advised that you set a time frame and a target according to which you would move and sell the stocks of a particular company. Always look for stocks of companies that are promising and would give you profits in the long run. If the market is on a downtrend then it is advised that you try to buy as many stocks as possible because the prices would be down and investing would be easy. Also bear in mind that more the money involved in stock trading more is the risk associated with it. So when you invest make sure that you know that the price of a particular stock would rise in the future and you would get profit out of your investme.nt
There are a number of people who are making a lot of money on Wall Street as compared to any other business or work. Now the question arises as to how can you make profit out of the stock market. If you as a beginner are looking for some specific tutorials or guidelines, which can make you a successful stock market investor, then as such there are no specifications.
The best tick for beginners investing in stocks is to keep a close watch on the market and understand what is going on in particular related to a stock that they wish to invest in. getting to know the basics and sticking to them, doing research on the market conditions every now and then, keenness to take risks. These are a few points that you should keep in mind while trading stocks to become successful.
If you are a beginner then there is no shortage of stockbrokers in the market. But, if you are investing bigger amount then it is better that you have your own trading strategy. For doing this it is better that you start with the basics of stock market and understand how it works.
The capital market consists of both the stock and the bond markets. This is the place where companies and governments heave up the money with security deposits. These deposits are then sold and bought by companies or individuals, which forms the basis of stock trading. It is best for you to try and understand the policies and the profile of a particular company with whom you are interested in investing and this will help you develop your trading strategy.
When trading stocks depending on how much risk you are ready and whether you are able to keep an eye on the value of the moving of shares you can trade in two ways:
1. Daily Basis Trading: In this trading the trader buys and sells stocks on a daily basis and keeps an eye on the fluctuating value of the stocks. And when it is optimum the stocks are sold to get the best price.
2. Delivery Basis Trading: With this the trader buys shares and keeps them in the stock and whenever the conditions are feasible and you are bound to get maximum profit these are sold. This type of investment is suggested for companies that show exceptional results on long-term basis.
When dealing with stocks it is always advised that you set a time frame and a target according to which you would move and sell the stocks of a particular company. Always look for stocks of companies that are promising and would give you profits in the long run. If the market is on a downtrend then it is advised that you try to buy as many stocks as possible because the prices would be down and investing would be easy. Also bear in mind that more the money involved in stock trading more is the risk associated with it. So when you invest make sure that you know that the price of a particular stock would rise in the future and you would get profit out of your investme.nt
mutual Fund
What are Mutual Funds?
When I was young, my grandmother was a great influencer of my life. Of course still she is! Whenever we plan for a travel she will take the cash and keep some in her wallet some in bag and some in my pocket and some in my mother’s wallet. I asked my grandma why so?
She will say “If you lose one amount by mistake or someone poaches it, the other will help you. Instead, if you keep all in one purse and if you lose the purse you lost the way.”
It was this concept in operations called as buffer, in engineering called as “Safety Factor” and in finance “The Balanced Portfolio“.
This is the underlying principle of mutual funds where instead of investing in one stock, they invest in a portfolio of stocks thereby they can minimize one’s risk and obtain optimum returns.
Let me try to explain this with two simple stocks for example. Let us consider one stock whose share value increases when index (assume sensex) increases and another stock whose share value decreases as sensex increases. The first one is called as “Positive Correlation” and the second one is called as “Negative Correlation“. The value which we use to measure how much the stock price increases with respect to sensex is called as “Beta“. It is nothing but the slope of the curve drawn in a graph where we take “sensex” (index) value in x-axis over a period of time and stock price in y-axis. So the first stock will have a positive beta value and the second one a negative beta value.
Now assume if you invest in only first stock assuming that sensex will move up and if it goes down you are going to lose a lot. Similarly if you invest in second stock thinking that sensex will go down and if it increases you will once again lose. Incase, if you invest in both the stocks (in proportion to how much their price vary according to the sensex index) you may not get maximum return but whatever be the sensex(index) movement bullish(upward) or bearish(downward) you will get optimum return. This is how mutual funds choose their stocks in their portfolio and maximize their returns and minimizes their risk.
But choosing stocks is not that easy as we mentioned. Many things in life are written but done with sweat. This is not an exemption for that. Based on this principle, some funds choose stock pertaining to only one sector called “sector funds“. Some in proportionate amount listed in all sectors in an index called “index funds” and so on.
This is simple thing we can also do as an investor by tracking the stock price. Instead of investing one stock, pick two or three by logics (or use tools if you can) and we can minimize risk.
And hope a few who benefit out of this will always be thankful to my great investment guru “my grandmother”.
When I was young, my grandmother was a great influencer of my life. Of course still she is! Whenever we plan for a travel she will take the cash and keep some in her wallet some in bag and some in my pocket and some in my mother’s wallet. I asked my grandma why so?
She will say “If you lose one amount by mistake or someone poaches it, the other will help you. Instead, if you keep all in one purse and if you lose the purse you lost the way.”
It was this concept in operations called as buffer, in engineering called as “Safety Factor” and in finance “The Balanced Portfolio“.
This is the underlying principle of mutual funds where instead of investing in one stock, they invest in a portfolio of stocks thereby they can minimize one’s risk and obtain optimum returns.
Let me try to explain this with two simple stocks for example. Let us consider one stock whose share value increases when index (assume sensex) increases and another stock whose share value decreases as sensex increases. The first one is called as “Positive Correlation” and the second one is called as “Negative Correlation“. The value which we use to measure how much the stock price increases with respect to sensex is called as “Beta“. It is nothing but the slope of the curve drawn in a graph where we take “sensex” (index) value in x-axis over a period of time and stock price in y-axis. So the first stock will have a positive beta value and the second one a negative beta value.
Now assume if you invest in only first stock assuming that sensex will move up and if it goes down you are going to lose a lot. Similarly if you invest in second stock thinking that sensex will go down and if it increases you will once again lose. Incase, if you invest in both the stocks (in proportion to how much their price vary according to the sensex index) you may not get maximum return but whatever be the sensex(index) movement bullish(upward) or bearish(downward) you will get optimum return. This is how mutual funds choose their stocks in their portfolio and maximize their returns and minimizes their risk.
But choosing stocks is not that easy as we mentioned. Many things in life are written but done with sweat. This is not an exemption for that. Based on this principle, some funds choose stock pertaining to only one sector called “sector funds“. Some in proportionate amount listed in all sectors in an index called “index funds” and so on.
This is simple thing we can also do as an investor by tracking the stock price. Instead of investing one stock, pick two or three by logics (or use tools if you can) and we can minimize risk.
And hope a few who benefit out of this will always be thankful to my great investment guru “my grandmother”.
Basic Technical analysis
Basics of Technical Analysis in Share Markets
Share market experts rely on two analysis before selecting a share for investment. One is technical analysis, in which a share’s movement of price and volume is studied over years and they try to strategize the movement. Another is the fundamental analysis in which they study about the company associated with that share, its sector growth etc.
However a genuine investor cares more about fundamental analysis of a company because the price of a share can be manipulated to go up or down. if this there on one side ,as I already said nowadays information about company and sector performance reaches all at the same time through media ,fundamental analysis also became a more common feature known to all experts.
So sometimes, a common man who is a regular observer of market is able to set good portfolio for himself when compared with experts. In this article I will just take you through certain basics of technical analysis.
Candlestick representation of a stock price movement within a day:
A share when traded will be subjected to four price levels:
1. Opening Price: The price at which the first trade is done or the market opens
2. Closing Price: The price at which last trade is done or When the market closes.
3. Intra-Day High: The maximum price the share was traded for the day.
4. Intra-Day Low: The minimum price the share was traded for the day.
This is simple ideal graph by which I am trying to explain you all the simplest way of predicting and investing. The share price is plotted for various days in a graph as shown above. Using statistical tools the trend line is derived. It will be observed that prices follow a particular pattern. Assume that you are close to level 4 of the graph. Since you know the price is going to rise after that you can buy the stock. The bottom vertical projections from x –axis indicate the volume of trade, usually at these points volume will be more because of buying. Similarly it is the reverse when you are point 3.this is the simplest way of understanding and in further articles I will take you to depth.
टिप्स फॉर New
Basic Rule of Nepali Stock market
1. Whenever market is high it will fall soon.
2. Whenever market is low ,if there is no external factor then it will rise.
3. Same rules applies to stocks scripts also.
Everyone say's that when market is high we will invest in shares , as doing intraday trading is risky. However we say that when market is going high investment is not that safe as it doesn’t make any point blocking your money when NEPSE is already zooming high. Wait for correction to come and then buy at lower price. Till the time stick to intraday stock trading.
Best time for investment - when market is down, though by keeping fundamental’s in mind.
Best time for intraday trading - Everyday is best day for it. Condition being some professionals are assisting you with there analyzes of stock market.
How to earn in Bullish Nepali stock market.
1. Always remember this is your hard earned money not anyone’s. So you have to take care of it and be cautious at every level, if you are taking calls from processionals then also.
2. Always follow Nepal stock market.
3. When market falls, don't panic, when market zooming don't be overjoyed as you can earn and loose both ways around.
4. If market goes up you first buy and then sell and if Indian stock market goes down, you first short and then buy.
5. Never hesitate to ask for professionals advice.
1. Whenever market is high it will fall soon.
2. Whenever market is low ,if there is no external factor then it will rise.
3. Same rules applies to stocks scripts also.
Everyone say's that when market is high we will invest in shares , as doing intraday trading is risky. However we say that when market is going high investment is not that safe as it doesn’t make any point blocking your money when NEPSE is already zooming high. Wait for correction to come and then buy at lower price. Till the time stick to intraday stock trading.
Best time for investment - when market is down, though by keeping fundamental’s in mind.
Best time for intraday trading - Everyday is best day for it. Condition being some professionals are assisting you with there analyzes of stock market.
How to earn in Bullish Nepali stock market.
1. Always remember this is your hard earned money not anyone’s. So you have to take care of it and be cautious at every level, if you are taking calls from processionals then also.
2. Always follow Nepal stock market.
3. When market falls, don't panic, when market zooming don't be overjoyed as you can earn and loose both ways around.
4. If market goes up you first buy and then sell and if Indian stock market goes down, you first short and then buy.
5. Never hesitate to ask for professionals advice.
Sunday, May 23, 2010
कर्रेंट IPOs
The followings are current IPOs for NEpalstock
1.Alpine Development bank from 23-26 may.
2.Diyalo Bikas bank from 31 may to 3 june.
1.Alpine Development bank from 23-26 may.
2.Diyalo Bikas bank from 31 may to 3 june.
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