What is positional trading in stock trading?

Positional trading is a form of investing where investors hold their positions for a long term with the expectation which will be profitable. In stock trading, only a few investors are succeeding because some are not consistent with one strategy. In the stock trading consistency is the key to gain a good profit.

positional trading

First of all, you will understand what is positional trading. In this kind of trading, a trader has to hold the stock for a certain period of time like days, months or years. This trading is much more like long term investment where a trader has to remain invested till their expectation turn into real profits.

In positional trading, the positions are usually based on long term investment or macroeconomic factors. These traders operate in every market like ETFs, stocks, Forex, futures etc.

Earlier trading was just simple like buying and selling stocks but now it is different. The technical analysts observe the movements in the past price and by which they predict the future price of stocks, just by checking the average you can understand the market trend for stock. Before moving further you should have a proper understanding of trends which is very essential.

Positional trading Indicators and their importance

These indicators analyse the market, whether it is moving up-down and how far a price swing.

Relative Strength Indicator (RSI):  This indicator compares the recent gains and losses for a specific period of time by which you can know the change of price movements. This indicator determines the proper time for profit booking.

For positional trading, traders should remain constant with one mindset. They should not be confused in many trading experts’ advice because doing this they lose their consistency, which is not good in this trading.

In this trading, you have to choose a good trading indicator by which you can gain a good profit. Before choosing it, you have to know how your indicator works, what kind of calculations does it make.

Apart from RSI, many other indicators are also available like channel or bands, moving average. A mean average indicator is used to see overextended markets for mean reversion and channels are used to see the rhythm of the market that is it breaking or not.

In a time tested strategy the chances of gathering profit increases phenomenally. In positional trading, you have to be in a long term perspective and you have to ignore the short term market uncertainty and should have a lot of patience. Traders are less disturbed with short term fluctuations unless impacts big difference in stock.

If you are looking for best trading tips so we are here to help you to make maximum profit. We are leading trading tips provider advisory company with minimum risk. Fill our trial form to find the best stock trading tips by our experts.

Top 5 Stock Market Tips for You – An Expert’s Advice

Stock market investors are the one who simply holds basic information and knowledge of the investing. Generally, most of such individuals begin through sticking to a buy and hold trading tactic. When it comes to the stock market, there are many tips for you to select before investing. To begin with, when you find trading tips, you should notice who is providing these tips. Most of the occasion, you only follow the opinion of most successful traders in the world. Even you should ensure that you did ample research on the stocks that you decide to buy or sell during trading stocks. There are some stock market tips that will assist you to know some significant concepts of investments.

Stock Market Tips

  1. Setting Your Goals

When you invest in the stock market, it is very important to set your goals according to the stock market. This is the most essential stock market tips that you should know the stock market is explosive and there is no assurance that your investment will come back in the amount you estimated or the time when you need it. That is why you need to make a plan and set up your aim to invest in the market.

  1. Control Your Risk

Risk management is a very essential thing that all investors must think about. It is due to uncertainty connected with it. You should try to measure the possible risk and take essential action accordingly. You must understand the value of research and taking an independent choice, it is time to realize the risks related to it. To validate your risk acceptance, you can take a survey that aims to help in recognizing the investing.

  1. Importance of Research

Without appropriate research, the outcome may be inconsiderate. Particularly if one goes to buy a stock or make a trade in share market instantly because of several intraday trading tips. There are some ways to consider market data to enhance the chances of an excellent trade. For example, traders can use basic and technological analysis of the market things and catch out the data.

  1. Portfolio Diversification

Investment portfolio diversification is another most important risk management tactic where you can expand your assortment by choosing other financial products such as bonds, equities, mutual funds, and derivative. Further, it can be realized by including financial products presented by different firms belong to standard sectors. The basis behind diversification is to handle the investment from market fluctuations and keep overall returns. By option, if an exact sector or company is not performing well, the other investments can continue the balance within the investors’ portfolio.

  1. Planning Your Stock Trades

Whether it is a battle or stock market, you have to keep this in mind that the planning and strategies help to win wars. With a pre-planned plan, one can change the wave of the stock trading for self in any way. You also need to ensure that your broker is the correct choice for common trading. You don’t want to finish up with a broker who has higher fees and less stock trading tools.

How to Choose Companies to Invest In the Stock Market?

Investing in stocks is all about buying an excellent business and not just a stock. If you are a beginning investor then you need to know how to choose a stock company. If you are interested in the stock market and wish to increase your money then you should read many investment blogs, economic magazines. You also should subscribe to the stock tips companies according to the good stock market and suggestion from different brokers. There is a need that investor smartly chooses a stock to invest in the Indian stock market for reliable returns. They need to find great companies to invest in the stock market.

stock market investment

The following are some points that one should remember to choose companies for investment in the stock market.

1. Set Your Investing Goals

There are many different people who invest for different reasons. There is someone looking to make assets for a life-changing occurrence down the path like retirement and a child’s college fund. The initial steps to pick stocks are determining the reason for your assortment. Moreover, Investors should focus on profits, capital defense. Approval requirements may have different investment criterion.

2. Keep Your Eyes Open

It is very essential to stay up to date on market events and views to be a well-versed investor. There are some important things like reading blogs, magazines and online financial news that is an easy form of passive research that can be done on an everyday basis.

3. Check and Evaluate Financial Health

When selecting stocks, it’s essential to think a company’s financial essentials that include earnings, working margins, and cash flow. Together, these things can cover a realistic image of the company’s current economic health and how gainful it is possible to be in the close to and long-standing.

4. Debt to Equity Ratio

Every company carries debt on the balance sheet. Even the great companies carry legal responsibility. However, you would like to be guarded of companies with higher amounts of liability. Look at the company’s stability sheet, and evaluate the debt-to-equity proportion. You would like a company that has more possessions than responsibility.

5. Positive Asset Utilization

The positive asset utilization is the ratio of income that earned for each dollar of possessions a company owns. For instance, if a corporation has an asset use ratio of 40 percent, it is earning 40 percents for every dollar of asset it owns. There are different ratios positive in different industries. It is very similar to operating margin; the asset use ratio is a way to calculate efficiency more time.

6. Know Your Risk Tolerance

Risk tolerance is a psychological quality that is genetically based but completely subjective by education, income and wealth because these raise, risk tolerance come into view to increase vaguely and negatively by age when one gets big, risk tolerance decreases. Your risk lenience is how you consider about the hazard and the amount of anxiety you feel while risk is near.

Final Opinion

Equity investments historically have benefited from a return extensively above other types of investments although also prove simple liquidity, entire visibility, and active regulation to check a level playing field for the entire. Investing in the stock market is a huge chance to make great asset assessment for those who are prepared to be reliable savers.

 

What is the Difference between Nifty and Sensex?

There are thousands of companies listed on stock exchange. It will be very difficult to track every stock that trades on an exchange. Therefore a small sample of the companies in the market is taken which is a representation of the whole market. This small sample is called an index. It is a statistical measure of the change in a portfolio of companies stocks which represent a portion of the overall market.

Difference between Nifty and Sensex

Sensex and Nifty are both large-cap index and from different exchanges that is BSE and NSE respectively.  They are the indicators of market behavior and give an idea whether most shares have gone up or down. Usually, it is used as a benchmark for portfolio performance. The index gives the comparison of returns on investment with other asset class like real estate, gold, bond, or debt.

The index committee which is made up of academicians, financial journalists, mutual fund managers, and independent governing board members choose the ‘sample’ companies that are listed. Sometimes there is change in these listed companies and is notified.

Nifty

National Stock Exchange Fifty is in short called Nifty50. It is a stock market index of National Stock Exchange and called Nifty50. NSE is located at Bandra Kurla Complex, Mumbai. It is a market-weighted stock index of 50 (previously 51) companies that are selected on basis of performance and financial soundness. These companies represent 24 industrial sectors.

Highlights

  • It came into existence in 1996 the base year 1995 = 1000
  • Previously it was named CNX Nifty, but from Sept. 2015 it was renamed Nifty50.
  • It is the biggest capital market of the country and one of the fastest.
  • It introduced the fully automatic electronic trading system in the country.
  • Depository services are offered through NSDL (National Securities Depository Limited).
  • Nifty is calculated using the free-float market capitalization weighted method. 50 constituent stocks (51 previously) are chosen.

Sensex

Let us start with Sensex. Full form of Sensex is “Sensitive Index”. It is a stock market index of Bombay Stock Exchange and called BSE Sensex. BSE is located at Dalal Street, Mumbai. It is a market-weighted stock index of 30 companies that are selected on basis of performance and financial soundness. They are large companies which are well established financially. These companies represent 13 industrial sectors.

Highlights

  • It came into existence in 1986, the base year 1978-79 = 100.
  • It is older than Nifty. It is the oldest financial market in the country.
  • Depository services are offered through CDSL (Central Depository Services Limited).
  • Free-float market capitalization method is used for calculating Sensex. 30 constituent stocks are chosen.
  • Free float stands for the stocks that are there for trading. Lock-in shares are not considered as free float.
  • Market capitalization is the combined worth of all stocks of different companies that are within the stock exchange.

If you are interested in trading shares and not sure which shares to sell/buy you can contact us through phone us or email us. We provide trading tips after doing fundamental and technical analysis of the company and changes in government rules and/or policies. There are many services that we offer in categories like equity, derivative and MCX. You can also avail our two days free trial by filling up the fields and submitting it.

Why do futures traders fail?

Futures are the financial contracts whereby the buyer is obliged to purchase an asset or the seller is obliged to sell an asset which can be a financial instrument or physical commodity. The transaction takes place at a predetermined future date and value. It is mentioned in the contract the quantity and quality of the asset in question. To facilitate trading on the future the assets are standardized. Some future contracts call for physical delivery of the asset while others are settled in cash.

futures traders

It is seen, many futures traders make a decent profit when they start trading initially and latter encounter endless string of losses. Sometimes their losses are so huge that they eat away their trading capital too. There are common pitfalls that you must know so you can avoid them.

You can decrease your loss and improve your odds for successes. We have discussed some common futures trading mistakes here that beginners usually make.

Not sticking to the strategy once it is made

Most of the traders have a strategy in place which helps them select trades as to keep loss minimum. When they are implementing their strategies and it starts showing fruits many traders start deviating or altogether  abandon the strategy and jump to some another one. By doing so they let emotions (greed, overconfidence) to creep in which ultimately leads to losses.

Not using buy/sell limits

Like all other trading activities, futures trading also involve a certain degree of risk and it is important to protect yourself. There are a few ways one can protect himself/herself. You can limit your buy or sell to a certain value so that your loss is in your comfort level. In other words, in the eventuality of loss you can withstand it financially. You can use hedging strategies like buying puts. The steps that you take to protect yourself will help keep loss to a minimum and it will maximize your profits.

Not concentrating properly

Futures trading require your full attention to read and evaluate markets effectively. There may be some distractions which are unavoidable and you can cut down on other few distractions, fewer the better.

Not open to new ideas

As everything change with time, so does the stock market. You may think of yourself as a great trader but there is always a new idea cropping up that can help you improve upon your results. Many a time traders think that they know a lot of things and there is nothing left for them to learn. As market condition change these types of ‘stubborn’ traders are left behind and they get only loss. If you welcome changes with open arms and embrace it in the way you trade, you will be able to change with the markets and profit consistently.

Alliance Research, under its derivative segment, provides intraday stock futures trading tips to traders. Our research team works for identifying movements in the futures market on an intraday basis. We provide recommendations that enable traders to earn maximum returns. Even help them reduce the risk. As per market movement, we provide 2 – 3 intraday future market calls and update you on important news and information.