Business and Marketing

This article presents the basics of stock trading. He distinguishes between trade and investment, and why we recommend a comprehensive strategy that includes a combination of trade and investment strategies to maximize profits and risk management.
When we started talking about the basics of trading, we like to start with the distinction between investment and trade. We believe there is a big difference. In very simple terms, we like to think that investment in terms of long-term benefits. On the other hand, is more like a negotiating tactic to generate short term profits. Above all, what is the outlook period is the difference between the two activities. Of course, depending on what one is dedicated to the analysis tools will be different.
In this article we will talk about trade activities and why we fall for it. It also dispels some myths that have been distributed during the year for transactions. First, we subscribe to a balance of short-term investments and long term trading strategies for all. We do not recommend that anyone who engages only in the long-term investments or any other person engaged only in the short-term investments. There are some great companies out there, which we believe will provide significant benefits year after year. So there is no interest in negotiating short-term these companies are not very specific reasons, such as risk mitigation and protection. But there are many companies out there that have the drive and sporadic over long periods of sideways movement. There are also several companies that for years will be negotiated on a beach. A simple example is Microsoft (Symbol: MSFT), which watches over the past 10 years.
So, if you leave a long-term investor in Microsoft stock? Exactly where he started. They have good reasons for Microsoft? Yes It 'a good company? Yes It 'always good and healthy dominating the market? Yeah So how can we explain the long-term investor, who made a mistake and should be invested somewhere else in the long-term benefits? We really can not. But what can we tell him that he should not be confused with its long-term buy and hold strategy with some short-term trading to produce profits.
So, what we mostly short-term trading? Overnight in the share price of Microsoft is here, in stock has traded between $ 20 and $ 30 above. So, in fact, if we were to buy $ 20 and sold for $ 30 every time he went this route, we would have done 50% of the profits every time. Someone might read this and say, easier said than done. How do we know exactly when to buy and when to sell? The answer is that it is not easy, but it is possible to approach the trading range, if not the technical analysis and to identify support and resistance levels. Level of support is only an exhibition, where the price "support for strikes," and usually stops sharing trends downward and starts to move again. The level of resistance is exactly the opposite. It is a trading platform, around which the stock price "hits resistance," Trends and stops and starts moving again.
This is the basic requirement for equity trading. A trader looks at these levels of support and resistance and commercial stocks in the sector to generate short-term gains to price movements. Microsoft has actually been one of the safest stocks trade over the years because of its close relationship with the levels of support and resistance.
This is the first and basic level of understanding should be thought of first purchase of shares. More information about this will follow soon.
It has been trading mostly between $ 20 and $ 30 during this period of 10 years. Surprisingly, the share price was about $ 30 in January 2001 and is about $ 30 in January 2010.
And 'typically a number of levels of support and resistance for the stock price, according to the calendar that is examining stock chart. Suffice it to say that the long-term support, Microsoft was about $ 20 level and long-term sustainability were approximately $ 30 mark.