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10 Biggest Driving Factors Determining Direction Of Stock Prices

Stock volatility is an unbeatable fact of life on Wall Street. It is due to a number of driving factors determining direction of stock prices.

According to a study conducted by MSCI Barra, the most significant factors that drive long-term equity returns are inflation (4.2 % points of MSCI World Index), dividend income (2.9 % points of MSCI World Index, Real book value growth (2.1 % points of MSCI World Index), price-to-book growth (1.5 % points of MSCI World Index).

These factors can move a stock price either up or down from current levels. However, the most predominant factor is usually the winner in affecting the share price of a given equity.

If you are successful in identifying that factor then perhaps you can build an ideal portfolio of outperforming stocks. Your stock allocation is the key secret to beat your competitors in the share markets. Here are 10 biggest factors impacting direction of share prices:

(1) Fundamental Factors

It is one of the biggest driving factors determining direction of stock prices. Stock market may price a share wrong from time to time. It can make a stock either undervalued or overvalued during certain time.

However, in long term the market price of a stock tends to move towards its ‘intrinsic value’, also known as ‘true value’ of a company.

Fundamental factors can play a significant role in determining true value of a stock. They can provide valuable information about an understanding of a company, health of its business operations & its future growth prospects.

Some of the best & popular fundamental factors that can affect its stock price include Earnings Per Share (EPS), Profit Margins, Return On Equity (ROE), Profit/Earnings ratio, Profit/Book Value, and Assets & Liabilities.

Thus, a stock with strong fundamentals but undervalued stock price as compared to its intrinsic value is a good investment opportunity.

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10 Biggest Driving Factors Determining Direction Of Stock Prices

10 Profitable Day Trading Tips To Make Money Quickly

 

Day trading is a greatest business in the world to generate wealth. Small investors often look for profitable day trading tips to make money quickly. It can help you to make a fortune from daily fluctuations in the share price of a security.

According to a post published at Securities & Exchange Commission, US, day trading is neither illegal nor is it unethical, but it can be highly risky.

Most individual investors don’t have wealth, time, or temperament to make money as well as to sustain devastating losses encountered during day trading.

Day trader should be able to monitor stock markets from opening bell till the end of trading session. You should remain highly attentive during this time period.

However, if you can’t invest your sufficient time due to a busy profession then perhaps intraday or margin trading is not for you. Here are 10 profitable intraday or margin trading tips to earn money fast:

(1) Hold Winning Stocks With Trailing Stop Loss Order

It is one of the most significant & profitable day trading tips to make money quickly. Intraday share trading is meant to generate profits through stock movements.

If your stock is moving in the right direction as per your expectations don’t square off your positions too early.

You should instead hold your positions as long as they are moving as per your expectations. However, you should not forget to put trailing stop loss order.

Trailing stop loss order is a stop loss order that is placed at a precise percentage below the market price. It will help you to prevent vanishing of profits due to profit booking.

[Read Also: 10 Ways Stop Loss Order Will Not Protect Stock Investment]

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10 Profitable Day Trading Tips To Make Money Quickly

15 Ridiculous Things You Must Avoid In Day Trading

Day trading is an attractive option to make money quickly in stock markets. But, some ridiculous things you must avoid in day trading. If you are successful in controlling day trading mistakes then money making is not a difficult task.

However, if you continue to make these mistakes you are likely to take away from trading itself. Day traders often ignore these simple & common things while trading but they can adversely affect your returns.

They are also known to increase risk to your hard earned money. You are advised to avoid these silly & ridiculous things by adopting a good strategy to beat your competitors. Here are 15 ridiculous day trading mistakes you must avoid:

(1) Borrowed Money

It is one of the first things you must avoid in day trading. Several day traders prefer to use borrowed money to buy & sell stocks for intraday.

You can borrow money either from your friends, relatives, moneylenders, or even from your brokerage house. Money borrowed from brokerage house is also referred as margin money.

Your borrowed money can help you to gain enough profits faster and/or in larger quantities from your trades. But, it can also increase your chances to lose money fast due to wrong trade.

Sometimes, even a single decline in the value of stocks purchased may ruin your entire capital. Therefore, you need to be extra smart to deal with stocks in day trading.

It is always better to use your surplus funds for intraday instead of using borrowed money from someone else.

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15 Ridiculous Things You Must Avoid In Day Trading

10 Basic Day Trading Rules For Intraday Traders

Every trader wants to earn money in stock markets. Your dream to gain profits can come true by following basic day trading rules for intraday traders.

These rules are not mandatory in nature but they are highly valuable for intraday or margin trading. They can help you to gain maximum profits with minimum risk.

Day trading is a fast-paced buying & selling of securities in same day during market hours. This share trading strategy can generate money within short period of time. However, your losses can also be steep if you avoid these simple & basic rules of trading.

Generally, day traders are full time traders. They utilize every possible opportunity to enter & exit trades. Intraday traders can either buy first & sell later or sell first & buy later. Here are 10 basic day trading rules for first time traders or beginners:

(1) Trade Only In Best Day Trading Stocks

It is one of the most critical & basic day trading rules for intraday traders. Every stock is not a fit candidate for day trading. You can generate profits from intraday trading only through best day trading stocks.

Some of the characteristics of best day trading stocks include stocks with high liquidity, stocks with reasonably volatility, sector specific stocks, stocks that matches your trading strategy, stocks with good correlation to overall markets, and many more.

Once you identified best stocks for intraday or margin trading, you can make your positions. Generally, these stocks are from large cap sector rather than small cap or mid-cap sector.

These stocks can provide you multiple opportunities to trade during market hours.

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10 Basic Day Trading Rules For Intraday Traders

11 Wonderful Ways To Select Best Day Trading Stocks

Day trading can make money quickly in stock markets. You just need to adopt some of the wonderful ways to select best day trading stocks.

These stock specific parameters or indicators are sufficient enough to find top day trading stock picks from share market. You can successfully scan the markets to choose profit boosting stocks out of thousand of available stocks.

Generally, intraday traders lose money perhaps due to wrong selection of stocks. If you can stick to stock selection guidelines then success is more likely.

It only requires some form of work & a little bit of research to find low-risk & high potential stocks for intraday trades. Here are 11 best methods to choose top day trading stock picks:

(1) Pay Attention To Highly Liquid Stocks

It is one of the first & most important ways to select best day trading stocks. Intraday trading usually requires very fast reflexes & instant execution of orders. It can only be achieved if a stock is highly liquid.

Liquid stocks are those stocks with high average trading volume. It can be bought or sold in enough quantities without much affecting its share price.

Some of the advantages of intraday trading in liquid stocks include easiness to buy & sell stocks quickly, easiness to buy & sell enough quantity of stocks, easiness to exit wrong trades with stop loss order, availability of buyers & sellers with every trend, & many more.

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11 Wonderful Ways To Select Best Day Trading Stocks

11 Profitable Intraday Trading Secrets Of Successful Traders

Stock market volatility can generate wealth. New & unskilled trading enthusiasts often look for profitable intraday trading secrets of successful traders.

It can help traders to minimize the risk of losing money to certain extent. You can comfortably play with daily ups & downs in share prices of stocks. You just need to make right positions at the most appropriate time to ride this intraday volatility.

If it goes in favor of your trade positions, you can generate good profits. However, if it goes against your positions, you have to bear huge losses.

Day traders are usually the first person to face wild moves in a stock. It can greatly affect their emotions which in turn can affect their trading decisions.

However, you can also be profitable enough like successful traders if you can follow their trading strategies. Here are 11 profitable intraday or margin trading secrets of successful traders:

(1) Stay Neutral For Price Movements

It is one of the most profitable intraday trading secrets of successful traders. Most successful day traders usually see the share price movements as per the prevailing trend. They never look towards price fluctuations how you want them to be.

In day trading or margin trading, a trade may go against your positions. New & unskilled margin traders may start looking for reasons why your position is still a good trade & why you should hold it.

It is very dangerous trading habit that can result in losing big money rather than earning. Most successful day traders have clearly-defined entry & exit criteria before making a trade. They never switch strategies while in a trade.

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11 Profitable Intraday Trading Secrets Of Successful Traders