Today we will try to know in detail about the mathematics of the entire stock market, following which will definitely help you to become a very successful investor. If seen every year, many people enter the stock market without knowledge, but due to not knowing the right way to invest, they also leave the market quickly after making a big loss.
If you want to earn good returns in the share market, then it is very important for you to know about the complete math of the market in detail. With the help of this article, how should new investors invest in the stock market today and along with being informed about every aspect of the market, we are also going to get detailed information about the complete mathematics of the stock market. Let’s start:-
First of all, before understanding the mathematics of the stock market, it is very important to have a detailed knowledge about it. Share market is a market from where people buy and sell stocks of various companies. Through the purchase of stock in the stock market, people buy the ownership stake of the companies, and as the business of the company appears to be growing, the share price also seems to increase accordingly.
If seen in the stock market of India, there are 2 stock exchanges NSE and BSE, where all the companies are listed. More than 1600 companies are listed in NSE and more than 5300 companies are listed in BSE. You can buy shares of any companies listed in both these exchanges very easily.
To buy shares of any companies, it is very important to have a Demat Account, from where you can buy and sell shares of any companies very easily. If you are new to share market then you can very easily open a demat account with Upstox, which is a very good broker to invest in share market, click here to open account on Upstox.
Mathematics of share market can be mainly divided into two parts, one is investment math of share market and second is trading math of share market, to understand both of these you have to follow different parameters. Let us know in detail what parameters you should keep in mind to understand the math of investment in the share market market and what you should keep in mind to understand the math of trading:-
The first parameter to understand the investment math of the share market is that it becomes very important for you to do the complete detailed fundamental analysis of the company. For this, along with the Balance Sheet of the company, you must always keep an eye on many different important parameters like Market Cap, PE Ratio, Book Value, ROE, ROCE.
With the help of these parameters, you will be able to get a better idea of the sales, profit, and financial condition of the company along with the business growth of any company very easily, and this will help the investors to invest in that company for a long time. With the help of those parameters you will get a better idea whether the calculation is ok or not.
If you want to understand the math of investing in the share market well, then it is very important to keep in mind the second parameter, which is to analyze the complete details about any business.
Before investing in any companies, you should know, in which sector the company is associated with the business and whether or not there is a huge opportunity for future growth in it, you must also keep in mind about that.
If you want to invest in a company for a long time, then you should see how the company is working in its business keeping in mind the future, and also what steps the company is taking to increase the growth of its business in the future. It is very important to keep this in mind that it is going to be seen working under this kind of strategy.
When you will get better knowledge about the business of the company, then you will be able to decide very easily whether the company will be good in terms of future or not.
The third investment math to earn good returns from the stock market in the long run is that you must always keep an eye on the financial performance of the company’s business. Most of the companies listed in the stock market are seen presenting their quarterly results every three months.
You should see and compare as well whether the performance of the company has improved as compared to the previous years or not.
If you feel that the financial performance of the company is constantly improving as well as increasing with the rapid growth, then you can definitely think of investing in the shares of that company for a long time.
When the financial performance of a company is seen to be improving, then even if there is not much growth in the share price of the company in the short term, but in the long run you will definitely see a big jump in the share price of that company.
To understand the math of investing in the stock market for the long term, you must always keep an eye on the business growth of the company. You must consider all these things, how the company is showing its performance in its business now and what kind of plan the company can be seen working to increase the growth of its business in the future.
One can give the shares of the company only after earning good returns in the future, whose business is good in the long run and the management of the company seems to be taking its business forward in the same direction.
That’s why you must always focus on this thing, every year the growth of the company’s business is seen going upwards or not, which is very important for every investor to keep an eye on.
To earn good returns from short term trading in the stock market, it is very important for you to understand the math of trading. To understand trading well, first of all you should come to analyze the stock chart of any company, you should carefully see how the candle is moving in the chart and what kind of pattern it is making.
If you want to know in detail about how to understand the charts of the stock market, then you must read this article once. Here you will get all the information related to the chart of the stock, with the help of which you will be able to get a better idea that at what time the right pattern is appearing in the chart and it is the right time from the market. business perspective. Keep all this information in mind while trading. urgent.
To understand the math of trading in the stock market, it is very important to follow the trend of the stock of the company as well as the trend of the entire sector in which the company is involved.
You should never trade against the trend in any stock, because trading always depends on the sector and very few stocks that move against the trend. Are.
If you want to earn good returns through trading in the stock market, then you should always think about investing by following the right trend.
If you follow the trend well while trading, then the trend itself will tell you when to invest in that stock and when to exit that stock with profit, so that you can go through trading in very less time.
To understand the math of trading in the stock market, it is very important to always be aware of the market news as well as the updated news of the company in which you want to trade.
If seen in trading, there are huge fluctuations in the share price of any company depending on the news.
If you stay updated with the market news and invest in the shares of that company at the right time, you can earn tremendous returns in a very short span of time.
If you do not stay updated with the market news at the time of trading, then you may have to bear a big loss at any time, so it is very important to always be updated with the market news at the time of trading. Business.
If we look at the most important parameters of stock market trading math, then it is very important to see the support and resistance of any share price.
Most of the traders trade by looking at the support and resistance of the stock charts for some time and earn very good returns, so if you also want to earn well from trading in the stock market, then you should know how to identify the support and resistance of the chart. Needed
By looking at the support and resistance of any stock, you will be able to get a good idea of when it would be right to invest in that stock price and when you can get out of it and earn better.
If you trade with good discipline by following support and resistance in the right way, you can definitely make good profits.
One of the important math of trading in the stock market is that you should always know how to avoid losses, for which you have to have disciplined stop-losses. If seen in trading, most of the new traders make the same mistake that they are unable to control their losses, due to which the new trader has to bear heavy losses in any stock.
If you want to avoid big losses in the share market then you should always follow stop-loss on every trade with discipline, so that you will never incur big loss and you can trade with less risk. Are. You can earn very good returns from this.