Previously, in my old article, I have stated that the stock market trading is all about the trends. And recently, in Stock Market’s Cycles article, I mentioned how important the stock market (as well as economy) cycles are. So, in here, we have two the most important things to be known as stocks trader (as well as stocks investor) which are Stock Market Trend and Stock Market Cycle.
“The movement is always in cycle. Therefore there is an up as well as a down in everything”
Words above has been repeated for many times and still not lose its essence and still applicable for many thing in this world. As stock investor and traders, I have seen the truth of this words via my activities in stock market. In my early stock trading, I see the cycle in world economy condition. There is a time in where an economy condition is in bad shape as well as in good shape. There is no forever in economy condition. It always moves as like cycle, sometimes up and sometimes down.
Indeed, there are many characteristics of Stocks Market. However, as newbie, it will be hard to know and memorize the entire stocks market’s characteristics – in my opinion, it is even almost impossible. Therefore, I suggest to know and memorize only the most important characteristics. Based on my experience, there are two characteristics which are the most important in stocks market. These two characteristics can be a big help in our stocks trading venture.
In Stock Trading, Never Oppose The Market Trends
The sentence above is the most important things to follow in stock trading indeed. There will be nothing good as outcome from opposing the current market trends for sure. In contrary, the outcome will be always good if we follow the current market trends. Therefore the most important things in stock trading is to know the market trends and then follow it. It seems like an easy way, right? But, believe me, it is already hard to exactly know the market trends alone and it is even harder to follow it.
As you already knew, Stocks trading is a trading activity that offers high gain. However there is a price to be paid which is the high risk. Yeah, Stocks trading is a very high risk business. Therefore it is very important to do it right and utilize the right tools to reduce the risks. In short, we should know how to trade the stocks in right way. Indeed, we can utilize the Fundamental Analysis (FA) and Technical Analysis (TA) to reduce the stocks trading risk. By using them, it is hoped that we know how to trade the stocks in profitable way.
Many people think that stocks investor doesn’t need to learn how to sell their stocks/shares. It is because people tend to think that becoming stocks investor means that to keep the stocks/shares forever and enjoy the benefit from the dividend only. However it is not fully true. Indeed, stocks investor must also know how to sell their stocks/shares. It is known as exit strategy for stocks investor.It is because the return of investment (ROI) will be not optimum if only buy and then leave the stocks as it is.