As a matter of fact to make money in market one has to be an opportunist and has to be a Hunter. Mere falling deeply in love with a certain group of stocks/scrips doesn't help always. These rules can help you in developing the vision for successful market participation.
Select growth stock
These stocks generally have high p/e ratio. These corporations are new in market with new understanding of business, new products. For example; Reliance power, Cairn India ltd, etc. There is high probability of Reliance power, when put next to Reliance industries, to rise 10 times more in next 5 to eight years because it is easier to double 100 into 200 rather than converting 10000 into 20000.
Avoid Last Bull run’s heroes.
Without a doubt last bull run’s heroes may give you better returns when put next towards the bank F.D.; but these stock most likely are not heroes in next bull run, on account of selling pressure because of the investors who will be stuck near last bull run’s top.
Seek for high relative performance.
Select stocks/ sector which show higher % of rise in price than % of rise in Sensex for purchasing.For instance here in the current rally from March 09 to December 09, the Sensex has moved from 8000 to 17000, showing approx. 120% growth; whereas Cairn India has moved from 80 to 300, showing greater than 300 % growth in price. Reliance industries from 490 to 1200, showing 140% growth.So, Cairn India has given a relatively better performance than RIL & the Sensex.This same logic can be utilized to detect the poor performers in the market. Have poor performers within the group of stocks for short selling.
Public participation in Stock market
It is not really basic fundamentals of a typical company that move the valuation, what probably the market place participants feels in regards to the the value of a typical stock. Human emotions will go to extreme. Price is representation of that. So trade in stocks having greater than 3 lacs volume everyday.
Equilibrium in Share Market
Market cannot sustain permanently with extreme emotions. It gets drawn to equilibrium.So start making investment when everybody, even professionals are fearing to take a position and begin unloading your portfolio when every Tom, Dick and Harry suddenly starts to speak in regards to the stocks, Nifty, Market confidently! (who else is left to purchase now?)Protecting 70% of total profit is the greatest strategy utilized by many traders. It assures your market participation & Profit protection.Finally, I am going to say this market is designed for individuals who agree that they're going up against countless superior brains & individuals who have devoted their blood and bone in researching the Market’s messages.
Keep visiting the website to get the knowledge about current trend in stock market and be a part of the team which has access to the best technical analysis resources in India. You can also use the Crorepati in Stock Market calculator to know the number of years you may take to become a millionaire or billionaire from the market. The general returns in market average 18%-24% every year for a retail investor who trades as per the trend. You can check out Indian shares tips to make money at National stock exchange or Bombay stock exchange.
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