Monday, 16 November 2015

Investment in stock market, but it is risky too

Investment in stock market, but it is risky too
The stock market is a place where many people head to generate good wealth. In the stock market the stocks of the reputed companies are listed. By buying the stocks a trader buys the ownership of that particular company. The more the number of shares a trader buys, the more is the ownership of the trader in the company. The prices of the stocks changes due to change in demand and supply. The higher is the demand of the shares of a particular company the higher will be its price. Similarly if the demand of the shares of a particular company goes down the price of the shares will fall. Thus the price of the shares in the stock market continuously fluctuates. One can buy the shares at a lower price and then can sell at the higher price. Thus the trader can make profit in the stock market by buying low and selling high. If the trader is anticipating an uptrend then buy call should be placed. Similarly if the down trend is anticipated the sell call should be placed. The short sell is a trade of selling first and buying at a later time if the price fall the downtrend will end up in incurring a profit.

The investment in the stock market is always involved with risks. There are equal probabilities of profit and loss in the stock market. The price movement can move in any direction and it is absolutely impossible to predict the price movements with 100 percent accuracy. If the trader follows a good strategy the chances of winning trades are more than that of loosing trade and the trader will end up in making an overall profit .However it’s a experience of the most that no strategy can be 100 percent correct. It is almost impossible to devise a strategy which is correct all the times.

The risk factor in intraday trading is the highest and then in short term trading and minimum in case of long term trading. In long term trading the shares are bought and kept for a long term. The diversified portfolio in case of long term investment even reduces the risk factor. The reputed advisory firms like Money Classic Research provide adequate advice on the stock market tips. One can take the help of advisory firm to form a diversified portfolio selecting the profitable stocks from various sectors.\

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