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| The Right Way of Trading Stocks. photo by pixels.com/Anna Nekrashevich |
Stock trading is the activity of buying and selling shares in the capital market through online trading applications provided by securities companies,
It can be in a short period of time, a matter of hours or minutes, it can also be in a long period of time, it can be monthly to yearly, it is still considered stock trading
The time for stock trading is when the stock exchange begins, at 09:00 AM, and ends at 16:00 PM, working days Monday – Friday unless there is a public holiday or holiday
Stock market opening hours in different US time zones
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| Source : stockanalysis.com |
It is at those times that stock traders buy and sell shares,
The life of a trader is very active in front of his PC/Laptop or Smartphone screen every day, in contrast to investors who buy a stock once and then just sleep and wait for the dividends to be distributed.
What is the difference between trading and investing in stocks?
But if they enjoy the proceeds from the sale of shares, yes, their name is a trader
That's the difference..
Most profitable, trading or investment?
Fundamentalist investment experts, will definitely answer, it's better to invest properly than trade, but in fact to get a lot of profit, this method takes a long time.
While in reality, trading with limited capital, can get a lot of results in a relatively short time, (if it is always profitable)
Examples like this:
If we invest: January 2021 we buy stock A, in March 2021 we have 20% profit, in the next 2 months in May 2021 the price drops 15%, what does that mean?? from January 2021 to May 2021 we only get 5% profit
In contrast to trading, in January 2021 we buy share A, in March 2021 we have earned 20%, then we sell the shares, Then in May 2021 share A has decreased by 15%, as traders we buy more stocks that are falling, then sell again if it's going up
Then the profit generated is much different, more trading than real investment, this is a fact
Types of Trading
Actually the various trades are only divided based on the time span played,
Stock Swing Trading
Swing stock trading is a relaxed type of trading with a relatively long period of time, it can be weekly to monthly, depending on the target set by each trader.
Usually in swing trading traders use additional indicators that are often used are MACD, Bollingerband, Moving Average, and News
Stock Trading Scalping
Stock scalping is a type of trading in a relatively short time span, it can be a matter of minutes, even hours in one day,
Often called the pickpocket model, the price goes up a little selling, the price goes down a little buy, like that, and this requires more concentration and makes the heart sport not relaxed.
Usually the indicators for analysis used are Stochastic and Bandarmologi
So what is the right way to trade?
We will explain how to trade correctly in the following explanatory points:
Choose stocks that have at least a good track record
It doesn't have to be blue chip stocks, or LQ45, IDX30 stocks that have a large market capital, but small Tier 2 or Tier 3 stocks are fine, as long as the company clearly has a profit, and debt is not too high
Why should that be? because trading is high risk, we have to anticipate when experiencing losses, aka stuck, at least these stocks can rise in price someday because they have a good track record
Set Take Profit and Sell Lost Limits
This is often overlooked by traders, especially beginners.
As a trader we must have a clear trading plan, when to take profit when to sell lost, this is very useful to avoid stuck terms and avoid greed
"Indeed, in trading, we have to feel quite a lot"
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