Tips For Conducting a Technical Analysis For Stocks and Commodities

Traditionally, there are three different ways to track and understand the movements of stock-market and believe me – Everything works….! However, making money requires consistent efforts in the right direction. It certainly means that detailed analysis and study of selected stocks is required.

Following are the means to analyze the market:

  • Fundamental Analysis
  • Technical Analysis
  • Information Analysis

Every investor needs to match the trading style in line with his personal traits and abilities.

Logical thinking – If you are good at arranging your thoughts logically and understands the basics of economy, balance-sheet, cash-flow, revenue trends and profitability, you are made for ‘FUNDAMENTAL ANALYSIS’

Intuition – If you are technically sound, can read numbers, charts and graphs with interest in colors and shapes, “TECHNICAL ANALYSIS’ is for you

Networking – If you are a party animal and love interacting with people and socializing, have reliable contacts and networks, “INFORMATION ANALYSIS’ is your cup of tea

To invest and make profits consistently, you must have a robust investment plan. Following are the simple tips to make a workable investment plan.

  • Put everything on paper
  • What to buy (factors like PE ratio, growth projection, etc)
  • When to buy (under-valued, market correction, etc)
  • How much to buy (your risk appetite)
  • When to book profits (set time limit for entry/exit)
  • When to book losses (always set a stop-loss)

While trading, refrain from ego and greed as they are the way to add bias in your stock-portfolio. Follow a discipline to periodically analyze your portfolio, associate with like-minded people and keep learning from books as well as past mistakes.

Leave a Reply

Your email address will not be published. Required fields are marked *