Trading Strategies
To become successful trader it is important to apply some trading strategies. Trading strategies are nothing but simple ways to follow to get success in trading.
Trading can be day trading (intraday trading) and some trader do delivery based trading like buying shares and holding them and sell them whenever the stock price goes up (after calculating the brokerage and taxes) without waiting for particular time frame, so delivery based trading can be for days, weeks or even for months.
For trader the profit is only parameter and not any fundamentals of the company. Including stocks, trading also takes place on future derivative, options (calls and puts), commodities, currency etc but these all require other type of expertise.
a) Trading on opportunitiesThis is one of the very common trading strategies used by most successful traders.
Trading on opportunity means, trading based on any news or information that makes either sector or stock to move in either direction. If it is good or positive news then the sector/stock price will move up and if it is bad or negative news then the sector/stock price will go downward direction.
If the stock price is expected to move up then the trader can buy and sell and make profit. Traders can also buy Option CALLS or future derivative if the stock or Nifty is going up.
And contradictory if the stock price is expected to go down then the trader can do short sell (only in day trading) and then buy when the stock price goes down. Traders can also buy Option PUTS and short sell future derivative if the stock price or Nifty is going down.
In future derivative it is possible to short sell the contract and wait till the expiry (one, two and three month’s expiry contracts, are available in India). Nifty as well as stocks are having future derivatives.
In options also it is possible to short sell the CALLS and PUTS.
If the stock price or Nifty is expected to go down then the CALL can be shorted or PUT can be bought and if the stock price or Nifty is expected to go up then the CALL can be bought and PUT can be shorted.
Please note To become successful trader the trader need to be always in touch with market and company news through either news channels or through news website.
Resources and How to trade?
1) Trading on Q1, Q2, Q3 and Q4 results
Q1, Q2, Q3 and Q4 results are one of the best opportunities to trade
Q1 - Result in April/May - for duration January to March
Q2 - Result in July/August - for duration April to June
Q3 - Result in October/November - for duration July to September
Q4 - Result in January/February - for duration October to December
The companies listed on NSE and BSE are mandate to declare their performance for every quarter and the results duration and announcement period is as mentioned above.
If any particular company posts good quarterly results then it is quite expected for its stock price to go up, so trader can make use of it. On the other hand it is also observed that this uptrend in the stock price will not last permanent, most probably, in a day or two the stock price will come down. So trader who did not get opportunity to enter into buy trade then can plan to enter into short sell trade after one or two, need to watch the stock price continuously.
Short selling happens in only day trading (intraday trading), future derivative can also be short sell till their expiry date (one to three months expiry), in options calls and puts can be short sell.
If you want to learn more about options then please visit options section on our home page.
2) Dividend, Bonus and stock split announcement
Mostly During the quarterly results the companies declare dividend payout, bonus payout etc and this brings positive movement in the stock price.
All the Quarterly results announcement dates will be available well in advance on bse site or else you can contact us.
3) Trading on News/Information
Any news/information that brings movement in the stock price would be considered for trading.
News like companies getting orders, mergers, acquisitions, stock split announcement, news of stake sale by promoters, change in management, company expansions announcement, pledging of shares, capacity addition plan etc.
All these news/information would bring movement in stock price so traders always keep close watch on such news.
The way to track all these is financial news channel, websites.
The following are few trading strategies
a) Trading on opportunities
b) How to short sell?
c) How to trade on Active stocks?
d) Trading on calls and put
e) Overtrading - the risky trading
f) Minimizing losses
To become successful trader it is important to apply some trading strategies. Trading strategies are nothing but simple ways to follow to get success in trading.
About Trading
Trading can be day trading (intraday trading) and some trader do delivery based trading like buying shares and holding them and sell them whenever the stock price goes up (after calculating the brokerage and taxes) without waiting for particular time frame, so delivery based trading can be for days, weeks or even for months.
For trader the profit is only parameter and not any fundamentals of the company. Including stocks, trading also takes place on future derivative, options (calls and puts), commodities, currency etc but these all require other type of expertise.
a) Trading on opportunitiesThis is one of the very common trading strategies used by most successful traders.
Trading on opportunity means, trading based on any news or information that makes either sector or stock to move in either direction. If it is good or positive news then the sector/stock price will move up and if it is bad or negative news then the sector/stock price will go downward direction.
If the stock price is expected to move up then the trader can buy and sell and make profit. Traders can also buy Option CALLS or future derivative if the stock or Nifty is going up.
And contradictory if the stock price is expected to go down then the trader can do short sell (only in day trading) and then buy when the stock price goes down. Traders can also buy Option PUTS and short sell future derivative if the stock price or Nifty is going down.
In future derivative it is possible to short sell the contract and wait till the expiry (one, two and three month’s expiry contracts, are available in India). Nifty as well as stocks are having future derivatives.
In options also it is possible to short sell the CALLS and PUTS.
If the stock price or Nifty is expected to go down then the CALL can be shorted or PUT can be bought and if the stock price or Nifty is expected to go up then the CALL can be bought and PUT can be shorted.
Please note To become successful trader the trader need to be always in touch with market and company news through either news channels or through news website.
Resources and How to trade?
1) Trading on Q1, Q2, Q3 and Q4 results
Q1, Q2, Q3 and Q4 results are one of the best opportunities to trade
Q1 - Result in April/May - for duration January to March
Q2 - Result in July/August - for duration April to June
Q3 - Result in October/November - for duration July to September
Q4 - Result in January/February - for duration October to December
The companies listed on NSE and BSE are mandate to declare their performance for every quarter and the results duration and announcement period is as mentioned above.
If any particular company posts good quarterly results then it is quite expected for its stock price to go up, so trader can make use of it. On the other hand it is also observed that this uptrend in the stock price will not last permanent, most probably, in a day or two the stock price will come down. So trader who did not get opportunity to enter into buy trade then can plan to enter into short sell trade after one or two, need to watch the stock price continuously.
Short selling happens in only day trading (intraday trading), future derivative can also be short sell till their expiry date (one to three months expiry), in options calls and puts can be short sell.
If you want to learn more about options then please visit options section on our home page.
2) Dividend, Bonus and stock split announcement
Mostly During the quarterly results the companies declare dividend payout, bonus payout etc and this brings positive movement in the stock price.
All the Quarterly results announcement dates will be available well in advance on bse site or else you can contact us.
3) Trading on News/Information
Any news/information that brings movement in the stock price would be considered for trading.
News like companies getting orders, mergers, acquisitions, stock split announcement, news of stake sale by promoters, change in management, company expansions announcement, pledging of shares, capacity addition plan etc.
All these news/information would bring movement in stock price so traders always keep close watch on such news.
The way to track all these is financial news channel, websites.
The following are few trading strategies
a) Trading on opportunities
b) How to short sell?
c) How to trade on Active stocks?
d) Trading on calls and put
e) Overtrading - the risky trading
f) Minimizing losses
