Nifty Trading Academy – In the stock market of India, there are tons of opportunities waiting for you. One can make good amount of money from the share market. But, it is also true that not everyone is able to taste success in this sector. A lot of people end up losing their money. So, how o enhance your performance in the stock market? The unpredictable nature of stock market often confuses a lot of people. Earning money in this field can be made easier by following certain tips.
Things that you should keep in mind in Indian Stock Market
Before you think about earning some good money in this sector, you have to understand it very well that there are no short cuts available. If you want to earn big then you will have to stay in this business for a long time. Yes, long term stocks usually provide better returns. Overall, there are two sorts of investors that you can come across. The first type can be termed as the fundamental investors. These investors do not give much importance to the share price. On the other hand, the second type of investors is called speculators; they focus a lot on the price of the stock.
So, it can be said that when the fundamental investors begin selling their stock, it is the time for the speculators to purchase the same. So, through the aspect of price momentum, the speculators take the advantage and end up making money. In other words, the bull phases are the opportunities that speculators look for. It is during the bull phase when they utilize the situation to make money.
On the other hand, when bear phases arrive, then the stock prices fall down, and in this situation they speculators earn money by utilizing the benefits of falling trend. If you want to follow the method of fundamental investors then you have to rely on the stocks of the companies that are really strong. In other words, companies that are fundamentally strong share their profits with the shareholders. The earning is shared in the form of dividend income as well as long term share price appreciation.
Also Read – Do’s and Don’ts in The Indian Stock Market
As a matter of fact, by holding shares for long term, the fundamental investors make money. But, the speculators are just the opposite in this case. When we say long term then we usually mean more than three years. The short term periods on the other hand means couple of days to a week. So, it is up to you to decide about what kind of stock market trader you want to become.
In both the cases, you will have to follow certain steps, such as-
- Check stock price and its trend – You will have to keep a close look at the market price of the stock you want to purchase. Considering the data of the last six months is essential in this regard.
- Company fundamentals – It is essential to figure out the strength of the company in its fundamentals. Aspects like profitability, liquidity of funds; debt level, etc. need to be checked.
- Stock price valuation – Finally, you will have to take a look at the performance of the stocks in the last two to three years.
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