Stock Market Trading Strategy for Beginners

Stock market and commodity markets seem to be an important avenue for people who want to earn good profits by investing small capital. Trading in the market is always associated with deep risks. There are equal opportunity of profits and loss in the stock market and commodity market trading. Thus it is always advised to the trader that he must follow some strategy and then only start trading. Also he should master the trading by doing paper trade and practicing the strategy. Once he is confident about the strategy then only the trader should start trading with real money.

There are many strategies that a trader can follow. He can use first hour strategy, pair strategy, gap strategy or spread technique of trading. The trader can follow other strategies also, besides these strategies. The spread technique mentioned above is an important and very conservative strategy for stock and commodity market trading. In spread technique two similar stocks are identified. In one stock buy trade is initiated and in other stock sell call is initiated. The difference between the buy and the sell levels is known as spread. Thus when the stock goes up there is profit in one stock and loss in other stock. Up to the time when one stop loss is triggered there is no profit and no loss situation. When the trend continues in the same direction there is profit incurred in this case. Similarly if the market goes down there is no profit and no loss until one of the Stop Loss is triggered. After this if the trend continues in the lower direction there is profit incurred in this case also. Thus in both the cases of market going up or down there is profit incurred. That is why this technique is considered to be a conservative one.

For the trader who is new to the stock market they can rely on stock market tips from the advisory firm. These advisory firms also have analysts who also work on technical analysis and above mentioned strategies.