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Stocks: A “stock” is a share in the ownership of a company.
Stock Market: A place where stocks and bonds are bought and sold. Stocks in the stock market are bought and sold at the same time by the buyer and the seller respectively who are commonly known as traders. In short we can say that stock market / share market is a public market for trading of company stocks and derivatives at an agreed price. In this article I am going to describe how stock market trading is similar to Newton’s third law.
Sir Isaac Newton, an English physicist, mathematician, astronomer, natural philosopher and alchemist, proposed a law known as Newton’s third law.
Newton’s third law states that “for every action there is an equal and opposite reaction.” I guess it doesn’t need to be explained in more detail, right?
Similarly, Newton’s third law of trading can be applied in stock market trading as follows:
For every buy or sell, there must be an equal amount of buyers or sellers on the other side. Share market is a zero sum game. For every buyer there must be a seller and for every seller there must be a buyer. But no one can predict where the final settlement goes, making profits from each of their purchases and sales. In this current market scenario there is really no such thing as more buyers than sellers or vice versa today. Every trader needs to understand that you can be on the wrong side of the table at any point of time and only a sensible portfolio management system can help you last in the long run.
Once you have joined the stock market, you must understand how it works. When you read you start with ABC, when you sing you start with SA-RE-GA-MA, similarly when you are going to invest in stock market you start with BUSINESS-COMPANY-SHARE Should start Before you embark on your journey of investing in the stock market, educate yourself on how it actually works.
To trade the stock market effectively, you need to have a simple plan that sets your goals and needs. This will help you to find out where to invest, how to invest and how much money to invest. In share market, stocks are the main key factors that decide your success in the market through profit and loss. Before buying or selling any stock, you must do a thorough analysis/research on the same stock.
At last I can assume that you all must have understood very well that trading is not just pure art, it also has some basic principles of science.
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