Stock trading should not
be done on a short-term basis as this practice is not sustainable for you to
earn lucrative returns. In order to achieve success in the stock market, you
should focus on trend investing. This is a practice where you observe a single
or a group of stocks that rise and fall in a similar manner.
For instance, if the
stocks of technology companies are going up, this is a significant indicator
for you to make an investment in them. Seasoned traders in the stock market use
this technical analysis to generate returns on their investments
successfully.
Kavan
Choksi- understand
the strategies for trend investing in the stock markets
Kavan
Choksi is
a widely respected wealth management consultant, an expert in business
management, and an investor. With his expertise in finance and economics, he
has helped several companies revitalize their businesses and make the most out
of their money in the financial markets.
An overview of trend investing
When it comes to the
subject of trend investing, he says that it is the process of placing all of
your money in industries, stocks, or markets that are expected to boom
consistently in the future. The idea here is to ride on the trend up till it is
the right time for you to exit from the market with large profits.
However, before you
invest in these growing value stocks, you must conduct adequate research so
that you can embrace the best practices for stock trading.
Critical strategies for understanding trading patterns
You should observe
trading patterns and look at the changes in prices before you fix your own
parameters for stock trading. For instance, you can examine the cost of the
stock that drops to a low level before it hikes up and again drops back to its
previous levels. Investors of this strategy call it the support level, as, in theory,
it is a point where there is sufficient demand to keep the stock from dipping
below that specified level. However, if the level falls further, you should
exit the store immediately.
Rate of change
Rate of change is
another popular strategy that explores the current price of the stock in
relation to its price at a previous point that existed in the past. Again,
there is another strategy known as the moving averages indicators, where
technical analysts focus on the moving average of the stock. It is fundamentally
the average cost of the security over a time span for a specific time period.
For instance, if the time span is 200 days and the stock price either increases
or falls sharply during this period, it could indicate a trend.
Business and finance
expert Kavan Choksi states that
there are many tools and credible resources that give you an insight into trend
investing. Market timing plays a crucial role here. Trend investing largely
depends on information from the past, and financial analysts in this field
believe that it is this past information that will help you to depict the
trends of the future successfully.
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