Today i found a new method to invest stocks. Most wealthy people invest in stock market, they want to get rich. Well everyone’s motto is the same. Unlike the day traders and the weekly traders, the investors try to get rich slow and steady. Investing in stocks gives you huge wealth, independence and financial security in the long run. Whether you have started or not, you should know how to manage funds easily and stress free. Managing funds can be headache and tiring process, try to be smart and follow simple methods for success. You need to understand how stock market works and how money is going around in stock market. We will see some of the basic steps and important method which is more practical in making money through stock market.
Do you have a wishlist?
Write down a list of things you want to achieve from trading stocks. Keep the priorities first and plan other things for later. Choose which one to do first when it comes to purchasing. What do you want to do when you retire? How much money will you need when you are in the 50s?? this is otherwise called the secret wishlist! Your dreams may be very big, but follow simple steps at every point of life and keep moving to achieve your goal. This clears the first step!!
How much can you risk?
Always risk the amount of money which you can afford or which you can repay at some time. And do not put all the money in the same stock. Be diversified and start making gains. When you put all the money in the same basket, there is a risk of money losing your money . it is a high risk and high reward situation.
Don’t be greedy
Don’t be greedy , this is the third step. Fear and greed are the two emotions in the stock markets. Most people want to get rich overnight, it doesn’t happen so quick. It takes a lot of time and practice. You need analyze and be intuitive about where the prices would go. In short, you must understand the price action of the stock market better and make money.
These are the basic information , I want to share with you, which you already know better. On the other hand, I want to provide you a practical method for investing in stocks. This method is to get 5% profits or more and the period ranges from one month to six months. It includes three steps
1. Identify the first 52 week high breakout
2. Check if macd divergence is positive
3. Make fundamental analysis of the stock
Iam a trader and investor . I will give an example explaining the same. You can use google finance for easy identifying of the stocks. Check the stocks that have make 52 week high today , you can find it from many websites like nseindia, moneycontrol, et markets etc.,
This breakout or high should be the first in this year, if you are looking for the year 2015 , check the high of 2014 and compare. Find the below chart for better understanding. The stock had a high of 64.20 in 2013 and in the month of june, the stock broke the year high. ( first breakout !!! which is more important)
We have completed the first step and we move to the second step, checking the macd divergence.
When the macd divergence is positive and the stock is above 52 week high for the first time, you can consider buying this stock and invest for months in this stock.
After the second step, you are now ready to check the stock whether it is fundamentally strong. I am new to fundamental analysis but you can check whether the debts are less and earnings per share is more. Last quarter results are good and next quarter results . similar like that, you can try the fundamental analysis for the selected stock,This would help you earn more money and happy investing !
Thanks for reading !! Have a nice day !!