There are certain times that the calculations and expectations do not go with the situation of the stock market and the stock price may fall. Therefore, holding and expecting it to rise in the near future is not intelligent. It is to be noticed that stock market is one of the most unfathomable markets and there are certain times when the prices fall or increase due to other reasons, not linked to any wise investment decisions. Hence, certain things are to be bagged every time a day trader seeks his investment in stocks.
The first step starts with picking the stock for buying. To buy stocks, it is of utmost importance to decide the company one wants to invest in. Any publicly held corporation is one of the choices available on stock exchange. On the other side not everyone can invest in privately held corporation run by particular group of investors. Fortunately, most of the larger companies are categorised in public companies, giving a trader a sheer chance to evaluate his investment target.
To evaluate any investment target, fundamental analysis and technical analysis prove a great help. Fundamental analysis includes the process of studying the company's management and current position in the market. Technical analysis, on the other hand, is based on the evaluation of charts to identify trends of the companies.
Once a trader is through with the investment target, it's time to get a broker at the service. A broker is the only person that can execute the orders of buying and selling stocks. There are two types of brokers available at trader's service. The stock brokers on one hand get most of the research work done for the traders and device the transactions, discount brokers on the other hand do not provide any advice, and they only act as middlemen to device buying and selling. However, the difference in their services varies with the amount of service fees charged.
Once, the broker is designated as the key person maintaining all other work. From advising to execution of orders and from research to maintaining the portfolio, the brokers provide all the services. However, the actual boss remains the trader. It is the trader who accepts or rejects the advices of the broker.
Well, the shares, which are purchased, have to be sold by the trader. Bulls in the market are generally beneficial to the trader where he gets a chance to sell the shares at high prices for what he purchased. But, it should be kept in mind that sometimes waiting for the share to grow more and more can fetch loss to the trader as it takes few moments for a share to break down to earth. Hence, it is recommended to limit the losses by selling the shares at sheer time.
Well, it is wise to sell the stock, which is going down, rather than holding it, and expecting it to grow in future. Also, execution of stop order can save the trader some heavy losses. It is the facility provided by stockbroker where a particular stock is sold at particular price. The trader orders his broker to sell it before crossing certain low limit that helps to maintain a decent profile and can save the trader from heavy losses. Hence, buying and selling need intelligence, planning and good broker that can advice well.
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