Once a company decides to go public, its shares are available for trading in the market. When trading stocks, investors can focus on many companies from small cap stocks to blue chip stocks and take advantage of bullish as well as bearish movements.
Traders can use day trading or scalping to benefit from small price movements in a trading session, or they can use swing and trend trading to ride the trend of an asset over several days, weeks, or more.
When investing in stocks, traders will turn to technical or fundamental analysis to predict price movements.
Technical Analysis uses price action to detect continuation, reversal, or indecision patterns as well as key levels like support and resistance or trend lines that have been tested in the past (as history tends to repeat itself). To sum up, this analysis involves the studying of historical market data to predict future movements and trends.
Fundamental Analysis on the other hand, relies on the quantitative and qualitative factors of a company’s financial statements. These are used to analyse a company’s intrinsic value and to determine if the stock is undervalued or overvalued by market participants.
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