Many of the investors analyze stocks based on their fundamental reports such as valuation in industry, P/E ratio of the stock in respect of industry and competitors, revenue but forget about technical analysis you all might have observed that all the fundamental factors are always not reflected in the market price.
Whereas technical analysis seeks to predict the price movements based on historical movement, mainly on price and volume with news in the market and reading the chart and analyzing the chart patterns in it to predict prices.
It helps traders and investors navigate the gap between intrinsic value and market price by leveraging techniques like statistical analysis, chart analysis. Technical analysis helps guide traders to what is most likely to happen given past information. Most investors use both technical and fundamental analysis to make decisions.
- Develop and pick a trading Strategy: First and foremost thing is to identify a strategy and implement that strategy into the trading system. For example, many traders and investors look for different EMA(Exponential moving averages) like 20 EMA, 50 EMA, 100 EMA, and 200 EMA to analyze the particular stock’s movement and position. If the signal gives them buy signal they buy the stocks and vice versa for selling the stock.
- Pick the stocks which suit your strategy: Picking the stocks which suit your strategy and keeping in mind that the stock is volatile with volume and having liquidity is also important to trade in those stocks.
- Finding the right Trading platform: Right trading platform also makes a lot of impacts when you are trading especially doing intraday. Picking the wrong broker while thinking of being cheap and cost-effective can lead you to make huge losses in day trading.
Here are the few best Trading platforms:
Zerodha Kite Trading Platform: Sign Up Now
Upstox Pro Trading Platform: Sign Up Now
You can also read : How to become successful trader