WEEKEND EDITION:------Understand the nature of the stock.

Sunday is a fun day. Just thought to write on something where most of us would connect. I would like to suggest something for the new entrance in the stock market. It’s my humble attempt to share my experience whatever little I have as a trader, investor.

1. When you plan to start trading, first choose 10 stocks which you feel are good. I preferably suggest to select stock which has future n options. It would be good keeping long term goal in mind. Now the question arises how to differentiate stock for trading. See the business where the scope of innovation is higher.

2. Just watch those stocks diligently on daily basis .Analyze their high, low and close every day. Right it down in your diary or collect data online. Compare it with index as to how a particular stock behave when market gaps up, gaps down or consolidate.

3. Gradually you will discover that you know this stock from ages & its trend is your good friend. You will know when it is happy, sad or sober. Now go with the flow. Out of ten, seven times stock would act the same way as you may have anticipated.

4. Now just see your trading diary (I assume you maintain it), you will see profits coming and are more frequent. Losses would still come but minimal. You like the green color of booked profit section.

5. Just to give an example, Before 2008 crash, reliance capital used to trade around 2000 odd levels & most of the time it would do nothing whole day till 2.55 P.M., and between 2.55 P.M. to 3.30 P.M it would up or down by at least 3% .

So, wanted to bring home these points. May be someone gets benefited.

About the chart posted:-------- Here i am posting monthly chart of reliance capital. See how beautiful was the up move from November 2006 to December 2007.People earned when it was going up, and earned when coming down.(ironically most people lost their money who were not aware about the NATURE of the stock).

P.S. ------- This is not any recommendation to buy or sell. It is for educational purpose only. Money market is risky. Talk to your financial adviser before any investment decision.

Wish you all a very happy and profitable trading. Thanks !!!!


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