90% of the traders in the Share market that this is a common problem, it will happen that when we buy a Share, that Share starts coming down immediately and when we sell it, it starts increasing very fast, but why is this? It happens whether there is any solution to this problem or not.
All the people who come to earn money in the Share market and are coming less than before, they also have to face this problem (if you buy Share in the Share market, why does it come down, if you sell it then why is it up?) .
Not only 1-2 traders, only 10% of traders are those who have bought the Share today, the price of that Share should increase today.
So friends, as there is a solution to every problem, in the same way, if we keep some points in mind while buying in a Share, then after buying in that Share, the chances of decline can be reduced, then definitely read this article completely.
When there is a storm surge in a Share i.e. there is a movement of 10-20% in 2-4 trading sessions, still there is a tremendous trading trend in that Share and then by looking at the price of its rising Share, we think that this Share I have had a break out and it is a very good company, the share price of this company is going to increase, etc. But no matter how good and strong a company with fundamentals, a temporary correction is bound to come.
There is panic in the market due to temporary correction and this panic causes profit booking and fall in the market.
No matter how big the company is, it is not a big deal to have minor corrections, but before the temporary downturn, panic is created and due to this panic, there is heavy selling at the above level and after that the period of consolidation starts. Because of this, instead of going up, he trades in the range for a long time.
Then the reason for selling that Share is that the share goes up, then comes back down after a few days, so as soon as a trader gets upset, as soon as he leaves that Share, later again one-way up or down. also increases or decreases faster than the other.
Understand with an example
XYZ is the name of a company, the results of that company are more than expected. A trader has an eye on the Share of XYZ company, but at that time he wants to buy the shares of this company, but he feels that it has increased so much earlier. Now I will not buy it but the Share keeps on moving unilaterally, later that Share is given buy recommendation and big targets on all the news channels, then the trader thinks that this Share should be bought and XYZ company In the Share market, when everyone is bullish in any Share, then profit booking comes in that Share and the main reason for this profit booking is insider trading.
After two-three days, the share that the trader buys falls in that Share, then that trader thinks that the Share I buy is falling, then the trader assumes that once just the Share at which I bought the price. If I come to that level, then I will sell from there and get out of that Share, after a while the Share starts rising again, then that trader feels that if the man had held this Share for a while, he would have made profit, but this problem is not solved. The first solution is that you do research on a Share yourself and find out how it is the return of the company and how strong the fundamentals of the company are, enter that Share later, no one should be blamed for the loss as well as you should not blame the company. While doing research, some new information will be available.
If you have taken a trade in a company with good and strong fundamentals, later that Share falls, then do the thing that stop watching the price of that Share again and again because seeing our price will not increase the price of that company's Share. are the ones.
Moral of this message If you have bought a Share, then it declines, then hold that Share very tight, keep in mind that only if you have bought a company with strong fundamentals, not only otherwise, that is why before buying a Share in the Share market, once the company Be sure to get information about it so that you do not have to square ul the position in the loss.
Most of a company's falling Share price without tip no one wants to buy and money is made quickly in rising Share, but getting stuck in four out of 10 trades is not a big deal, that's why the first strategy is as strong as your strategy. Your chances of getting stuck will be less.
- Keep your trading portfolio diversified Do not invest all your money in a single sector Share.
- One should keep on making partial profit booking at the upper level.
Event trading in the Share market
There is no exact definition of event trading in the Share market, but when some big announcement is awaited in the market such as the announcement of corporate action, election, budget etc., before making a trading strategy, it is called event trading.
Before the trigger of a big announcement, there is a lot of volatile volatility in the market, that is why event trading is done mostly by professional traders because they can face losses more than the returns they expect.
This is the biggest reason for falling after buying a Share, the reason for this happening is Expectation.
If both the Share market and humans walk on expectation, then let us understand with an example.
Like if a trader first thinks that I buy that Share which will make me quick money, then the date of declaration of results of XYZ company is announced that the company will present its quarterly results on this date. The trader thinks that I should buy the shares of this company because this Share will be in the news, that is why he buys the Share of that company. Books a profit by selling it.
Most of the company whose Share price starts rising two-three days before the coming results, then there is a 75% chance of the company's results being better than expected, the person who tracks and runs the company knows how the results are going. But retail traders do not have insider news.
If the company presents better results than expected, then there is a tremendous boom in the Share of the company because only on the basis of the results in the Share market, deals are made in the Share boom and bearish.
If the company's results are weaker than expected, then the signs of bullishness in the Share end, then the process of decline in the Share starts. Because when the market is in a boom, the companies whose results are good, the company's Shares run at the forefront; That is why one should never buy in more quantity before the results of any company.
Ignoring the market environment
Earning money in the Share market is not as easy as it seems because if you understand the market environment and work with the discipline, it was easy to earn money from the market for a trade, but it will be dependent on the market, that is, in the market. If you are fast then it is easy to earn money by trading fast. The market is not always bullish, that is why it is said that the trader should be an all-rounder and sometimes the trader should also make a habit of not trading if the market environment is bad. In a bad environment, a lot of money is made by selling intraday, even a trader should focus on this art, do short selling only in intraday. If you buy a Share in the Share market, why does it come down, if you sell it then why does it go up? This is also a reason for this, so sometimes one should wait and watch in the market. Start taking quality companies in pieces at a cheap price such that your money is also safe and income can also be there. Shares that fall the most at the time of market decline are those which have gained a lot because when a Share rises, no one wants to buy at the high valuation of the Share, that's why most of the midcap smallcap penny Shares fall after reaching the high level. come.
The smarter and wiser a successful trader is, the more money he makes from trading, that is to say, a trader should be passionate and agile but should not take any trade hastily, especially if the trade is taken for short term. .
Even in intraday trading, one should not execute hasty trades because haste and haste always leads to wrong decisions. Buying should be done only after doing research such that the risk of loss is less - moving average, support and resistance, buying and selling levels, market index and sector, corporate action in a separate post will be available soon. .
Technical analysis
Technical analysis is the only education that makes a trader a professional trader like LLB degree is necessary to become a lawyer etc. Similarly, it is very important for a professional trader to learn technical analysis.
Before thinking of making money in the market, give importance to technical analysis because when the driver learns to drive a car, the risk of getting an accident is reduced, so once understand the technical analysis, how technical analysis works.
Technical analysis is not a rocket science, while understanding it, a trader should give some time because it is said that one who has patience can achieve everything in life.
(If you buy a Share in the Share market, why does it come down, if you sell it, why does it go up?) The reasons for this are not doing technical analysis and there is a reason to trade without seeing the chart.
Support and Resistance
Support and resistance have an important role in the Share market, as if a Share closes below its support, then there is a huge fall in the Share, if it closes above the resistance, then a new range for the Share to rise comes out.
If the Share price trades above the support, then there is a best opportunity to rise, if it does not close above the resistance, then there is a possibility of a fall in that Share because profit booking is seen at the higher level, this is also one of the reasons. Happens when we enter a rising Share price, it immediately declines after buying
The Share market does not care how much money you have, just to earn money from the market, a trader should know how to manage his risk.