1) Trading based on Technical analysis: There are many ways to trade and out of them trading based on technical analysis is the most common way. Technical analysis is the analysis of price movements in the markets based on various indictors. Various types of charts are drawn to understand the trend of the price movements. Also the different types of time ranges are used in the analysis. The various types of indicators used in the technical analysis involves moving averages, Exponential moving averages, RSI, MACD and Stochastic. Thus technical analysis is a whole new in depth field of analysis of the price movements of the stocks.
2) Trading based on Trends: The trend method is the simplest method and is used by many traders. In trend method an uptrend or a down trend is identified and then trade is placed with a view of profiting from the trend. Thus if an uptrend is observed, a buy call is placed and if a down trend is observed a sell call is initiated. It is always advisable to trade with the trend and not to trade opposite to the trend.
3) Trading based on News: Another method of trading which is adopted by a lot of traders is trading based on news. Positive and negative news have their impact on the price movements of the stock or the commodities about which the news has come out. An important part of the News trading is that, first a proper source of the latest news should be found out. Also the source should provide news at proper time and before other sources.
Thus above are the methods of trading effectively in the Equity markets. Also at times the traders take the advice of the advisory firms which provide accurate stock market tips.
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