Call it an index, a benchmark, or just standard data, Nifty can make you rich.
Nifty 50 can be a goldmine, of course, if you’re going with the right strategies.
Be careful though! Stock market trading is highly liquid. You can be exposed to both profit and loss scenarios. And yes, you’ll need to prepare for it.
But it’s good for learning. Besides, following the right share market news and updates can get you to a less volatile level for predicting your investment outcomes. They can also help you build the right strategies. Here is where we are going to learn about that.
Before We Begin: The Nifty 50 in Brief
Nifty 50 is an index or benchmark. What does it showcase, though? Well, in plain words, the National Stock Exchange of India, or the NSE, has got 50 companies. The performance of the companies is tracked by an index or benchmark: Nifty 50.
You see, the companies vary from IT to energy companies to telecom, real estate, and more in the world of stock trading. This does mean the indexing is subject to constant change. You can still define this change by the way of capitalization, although in an approximate sense. Since you calculate the index with the help of the capitalization-weighted method, you will expect the companies to leverage more capital to influence the indexing.
Here Are a Few Stock Trading Investment Strategies for Nifty 50
Due to the highly fluctuating nature of Nifty 50, making the right investment strategy is extremely important for a stock trader. After all, no one wants to lose huge amounts of money even if they know stock investment includes high risks. Therefore, making the right strategy and improving it with market changes and updates is more important than the amount you are investing. Below mentioned are a few of them:
- Selling and Buying Trades at the Right Time
Let’s bring this as simply as possible. The market experiences something called a gap up and a gap down. Don’t be appalled by these terms, though. A gap in the market means when the previous day’s closing price is less than the opening value. This means the stock has gotten expensive and it is in a good phase to invest in. You can buy them.
On the other hand, a gap down refers to the previous day’s closing price being more than the opening value. This significantly points out the fact that the stocks can lose value pretty quickly. If you own this stock, then it’s better not to delay keeping them because they are going to lose value soon. Sell them.
- Intraday Strategy Is a Good Investment Strategy
Do some homework at first. You’ll need the help of a charting software for this.
Now, pay attention closely.
Set two candle charts. Find a point in both of them. They should either be bullish or bearish. Good!
With the first two bullish candles, you would want to place your buy order at the high of the candle. With that being over, setting the stop loss will make sense if you keep them at the low of the same candle.
Now think reverse with bearish. Take two bearish candles, placing your buy order at the lowest of them. Naturally, setting your stop loss at the high will help you integrate this setting in its proper form.
You see, it’s all about integrating the strategy by backing them up with proper settings. This might offer you a good advantage of minimizing loss because you put more wiggle room.
- Iron Condor Cannot Be Ignored
Let’s be honest here. It’s very difficult to comprehend whether this is going to give you profit or loss. But hey, stock trading is a risky business, isn’t it?
Iron condor refers to a process when you sell a call and then put an option. However, they are linked somewhere. Both of them have the same expiry date.
Does it sound depressing? Not at all when you consider the difference in the strike prices.
The strike price difference is going to result in profit and this is where the Iron Condor strategy is somewhat useful in terms of profits. You see, the difference in these two mentioned options already gives you profit. Now, even if these two options expire worthless, then you still gain profits because you get to own the premium as profit.
Well, the bad news is your asset price reaches a point where it’s more than the strike price, then, of course, it’s a loss for you.
To Conclude
Following share market news is a good thing. With that, you need to do a little homework as well to learn the tricky things about stock trading. Investing money is key for share market trading. However, investing time in this initial homework and strategy formation is more important.
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