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Key Elements of Successful Trading

Trading is an activity of exchanging or buying and selling of goods or services. Medium of exchange for these transactions is money. To make it a successful trading, there are various key element s associated with it as,

Controlling Risk- Trader generally use "sell stop" (used to sell an option when it reaches it predetermined price) and "buy stops" (used when an option becomes a buy order by reaching a particular price) in order to minimize risk and maximize profit.

Technical Analysis- This method is used to predict the future market trends by evaluating and studying the market using previous price and patterns.

Patterns- This is basically the change in direction in the price along with change in expectation. It took several days, months, sometimes years to develop a price movement.

Buy and sell Indicators- There are two popular indicators mentioned one is Relative Strength Index (RSI) and another is Stochastic Oscillator. RSI helps to compare the inside strength and weakness of a stock whereas, Stochastic Oscillator decides whether the stock is affordable or not.

All these basic elements will help you succeed in trading. For more information regarding options trading strategies and potential trade areas can be better understand by infographic shown below.


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