Analyzing the stock market is a very daunting task. Many people have tried an aggressive way and failed miserably. To become skilled at stock trading, you must learn the key technique to analyze the major stock and find a profitable setup. Though it will be challenging. you can learn it by following some key steps. Before we begin, you need to know that following a shortcut in the stock trading market is like running of the edge mountain. You have to be gentle with your approach and only then can you do the perfect analysis. So, let’s see how we can analyze the major stocks in Hong Kong and find profitable trade setups.
Technical analysis
Technical analysis is the key to finding precise trade setups. Without using the technical data, you are just placing the trades without having any specific target. The stop loss will be wide and the entry price will not be as good as you wanted. To save your trading capital, you must learn to take the trade most professionally. That means you have to learn technical analysis in the demo account. Start with the support and resistance level. After getting hold of this term, it’s time to learn about the trend line tools. Using the trend line is a very effective method to ride the major trend in the market. Though it will impose a great pressure on your trading business, it is the only way you can improve your skills in stock trading.
Fundamental analysis
The next part is fundamental analysis. You might not give any importance to fundamental analysis but it is the root of the cause of major movement in the stock market. Spend some time and study the fundamental report of the top analyst. Look at this site and you will find specialized reports on the major stocks and you will get the general idea of how the professional stock traders look at the macroeconomics. It might sound very hectic, but the process is really simple. Give priority to the major news, and you will be able to execute the quality trades with low risk. After you become good at analyzing the fundamental details, it’s time to learn about screening the stock.
Screening of the stock
Screening of the stock is a very tough task and the pro traders always consider it as the best method of reducing the risk exposure. So, what is screening? It is the process by which the trades are taken out of a much bigger potential trade setup. Let’s say you have a long trade setup in Google, Amazon, and Tesla. So, which one should you buy? Is it better to buy the three major stocks with low risk in each trade? It might be one method but the pro will use the screening method to find the best out these three major stock. That means, they will assess the technical, fundamental, and sentimental factors of the market to choose their trading instrument. It might sound technical, but it can be very effective in the long run.
Diversifying your risk exposure
Diversifying your risk exposure is a very old technique used by professional stock traders. Instead of buying one asset, they tend to buy multiple assets so that the risk decreases. But it can also magnify the risk if you chose stocks of the same type. This means you can buy all the stocks from tech companies expecting the price to go higher. Sudden restrictions in the tech industry can cause a massive downfall in all the assets. That means you have to buy or sell stocks on different types of assets so that you can diversify your risk profile and trade the market without having any stress. Use this method and you will get a good result.
