Stock market and commodity markets seem to be an important
avenue for people who want to earn good profits by investing small capital.
Trading in the market is always associated with deep risks. There are equal
opportunity of profits and loss in the stock market and Commodity Market Trading.
Thus it is always advised to the trader that he must follow some
strategy and then only start trading. Also he should master the trading by
doing paper trade and practicing the strategy. Once he is confident about the
strategy then only the trader should start trading with real money.
There are many Strategies that a trader can follow. He can
use first hour strategy, pair strategy, gap strategy or spread technique of trading.
The trader can follow other strategies also, besides these strategies. The
spread technique mentioned above is an important and very conservative strategy
for stock and Commodity Market Trading.
In spread technique two similar stocks
are identified. In one stock buy trade is initiated and in other stock sell
call is initiated. The difference between the buy and the sell levels is known
as spread. Thus when the stock goes up there is profit in one stock and loss in
other stock. Up to the time when one stop loss is triggered there is no profit
and no loss situation. When the trend continues in the same direction there is
profit incurred in this case.
Similarly if the market goes down there is no
profit and no loss until one of the Stop Loss is triggered. After this if the
trend continues in the lower direction there is profit incurred in this case
also. Thus in both the cases of market going up or down there is profit
incurred. That is why this technique is considered to be a conservative one.
For the trader who is new to the stock market they can rely
on stock market tips from the Advisory Firm. These advisory firms also have
analysts who also work on technical analysis and above mentioned
strategies.
There are many Strategies That a traders can follow. He can
use first hour Strategy, pair strategy, gap strategy or spread technique of
trading. The trader can follow other Strategies also, besides these strategy.
The spread technique mentioned above is an important and very conservative
strategy for stock and commodity market trading. In spread technique two
similarly stocks are identified. In one stock buy trade is initiated and in
other stock sell call is initiated.
The difference between the buy and the sell
levels is known as spread. Thus when the stock goes up there is profit in one
stock and loss in other stock.
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