The basic principle in share trading?
By DoctorDidi
@DoctorDidi (7018)
India
April 9, 2011 6:34am CST
The basic principle in share trading is to buy low and to sell high. This means one should try to buy a stock as low as possible and to sell the stock as high as possible. But how can one ascertain the lowest possible and the highest possible price? Is there any hard and fast rule or a clear- cut guideline to ascertain the optimum price of a stock?
5 responses
@hardworkinggurl (37062)
• United States
9 Apr 11
Trading in my opinion can be tricky. I would probably do research on the stock itself. Find out if it is a marketable stock. No point in buying if it is so low that it is not trade-able.
Then research as to what the going rate actually is and to a comparable, if the purchase and trade-able profit is worth it.
I can be a hit or miss when it comes to trades sometimes especially for first timers.
@msdivkar (23356)
• India
10 Apr 11
You are right doctor the basic principle in share trading like in any other business is to buy low and sell high but unlike in other business, in share trading you do not get the value you stipulate at the time you want to sell. You have to wait for the price to make profit. The positive part is there is no limit to what you can gain from share trading if you have got the capacity and mental strength to hold what you purchase. You invariably loose if you are a short term trader or investment done on borrowed money. The best way to earn on stock market is to buy the stock and hold it for long time say 10- 15 years period. Best example of this is the shares of Sesa Industries Ltd.. 100 shares purchased in 1994 for Rs.2250 has given whopping return of over 1.2 lacs. I had posted about this sometimes back here on this forum. You might have missed it.
@yugasini (12892)
• Secunderabad, India
9 Apr 11
hi didi,
i am entered in share trading field before 25 years,most i have gained in primary issues only, i have not tried much in secondary market, still i have more than worth of fifty thousand rupees of shares alloted in primary market,now they are not even fit to clean my tounge,now the trading is online,but i need some money to trade i will try in next year,have a nice ay
@funkyguy009 (138)
• India
9 Apr 11
I dont think there is any hard and fast rule or a clear cut guideline for buying or selling shares. But yes, Indian stock market gives you an opportunity in every 3-5 years time span to buy shares which can change your life in 2-3 years. I guess you remember the downfall of Indian stock market in the year 2008.
@Strovek (868)
• Malaysia
9 Apr 11
It is extremely difficult catch the lowest and the highest points for the price. It is more an art than a science.
Since it is more an art, there are not hard and fast rule on what to do. Also the rules sometimes change with time.
Technical Analysis will provide some guide.






