Thursday, 24 September 2015

Trading Strategies for Equity Market

Trading Strategies for Equity Market - Money Classic Blog
There are many strategies that the traders can adopt to trade in the equity market. The trader can trade in using strategies like Gap strategy, first hour breakdown strategy, spread technique and scalping techniques. The trader can also rely on advisory firms which provide accurate stock market tips. These advisory firms have experienced technical analysts who on the basis of their in-depth technical analysis and fundamental analysis provide buy and sell calls for various stocks. The various intraday strategies are discussed below:

1) Gap Strategy: In gap strategy the gap is first observed. The gap is the difference between yesterday’s close and next day’s open. Depending on the type of gap and the magnitude of the gap, the trade signals are initiated. Thus gap strategy is an important strategy to trade effectively.

2) Break Out Strategy: In first hour breakout strategy the trade in the first hour is observed. Then a breakout from the range of first hour is seen. The breakout is looked as the initiation of trend in both the up and down directions. The breakout strategy is based on the fact that the trend forms after the first hour of trading which involves more price fluctuations.

3) Spread Technique: In spread technique the same stock is bought and sold at the current prices. The profit in one of the stocks is balanced by loss in other. After the neutral phase is finished the profits are earned in the either directions. This spread technique is an effective and conservative way of trading.

4) Scalping Technique: This technique is used to gain small profits on the basis of small price movements. Thus irrespective of the direction of the price movements the small profits are captured. The efficient use of stop loss is required in this strategy.

Various advisory firms also follow these types of strategies along with technical analysis and fundamental analysis to provide stock market tips.

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