Markets need to be analysed on three lines: Fundamental, Technical and Quantitative. Investors or traders tend to adopt any or all of these tools for making investment decisions. Track record, business opportunity, people, technology, operating leverage, valuations, all has a bearing on investment decisions.
Investment planning depends on your financial objectives, risk-return profile, time horizon and the capital that you wish to deploy. Once you are through with this basic exercise, you can opt for such financial products that suit your requirements.
You should go for fundamentally sound stocks. Slow growth in price and market price fluctuations really don't matter at all in long run. Just stay invested and you’ll enjoy decent returns.
Invest across blue chips across sectors and a select few mid caps with good business model. It’s better to begin with mutual funds as they happen to be professionally managed by competent fund managers across sectors and themes. Don’t trade against the tide, book profits and keep trailing stop losses. No investment would guarantee 100% return in a year. For safer bets, invest in FDs and MFs.
Choosing a good broker
Do comprehensive research on the options available. However, don’t fall for low brokerage rates alone. Also consider the track record of service and research.
On low-investment business ideas
Low is a relative term. It varies from venture to venture. For instance, setting up a new hotel might require a couple of lakhs but if you were to start a mining business, even a few crores may prove to be a very negligible amount.
On Basic Market Terminology
A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for a stock. It is usually referred to simply as the "bid." Vis-à-vis Ask price, also called offer price, offer, asking price, or simply ask, is a price a seller of a good is willing to accept for that particular stock.
A stop order (also stop loss order) is an order to buy (or sell) a security once the price of the security has climbed above (or dropped below) a specified stop price. A limit order is an order to buy a security at not more, or sell at not less, than a specific price
The era of trading in physical share certificates was very cumbersome. Now the shares are held in a dematerialized form and these securities are held in an account called as Demat Account.
Technically, when a stock crosses above its 200-DMA with impressive volumes and positive crossovers in daily Oscillators, it would be an ideal time to go long. The basic formula to calculate 1st,2nd,3rd support and resistance level - Pivot tables
On the formula for making it big in stocks
Firstly, don’t be desperate to make too much money too soon. Disciplined investing and time spent in the market is the key. To begin with, identify two or three good Mutual Funds and invest through them.