A seasonal investing has a start date, end date and price ups or downs between this time period. Stock market is of highly volatile nature and market performance is not only dependent on the time of year but days of month as well. Traders who have picked stocks wisely have earn good returns from market and those who have not it has been really difficult for them to earn well from market. For improving trade results precise trading tips, mcx tips and more can be used. Along with relevant information , some seasonal related trends , trends which have to do very less with stocks and economic conditions prevailing at present also influences the prices in market. Having a good understanding of seasonal effects is important because they often explains the reasons behind the frequent changes in market.
Following are the ways through which stock market undergoes seasonal change :
1) The December effect
Indian market perform reasonably well by the end of year but it is not true that it will give you steady returns at this time period. As global market is off during this month, we do not see much movements in market and there is less liquidity in market. In this particular period traders can go for auto stocks as they tend to perform well here.
2) The January effect
In January budget is awaited therefore traders should be careful with their trading strategies here. It is advised to use stop loss level aggressively to protect their portfolio from market effects and perform well.
3) A new month and monthly change
With the changes in months it bring few new patterns in trading. Traders can use this seasonal investing trend for their benefit easily. A smart trading strategy which can be used here is trade only on the first day of a month. This idea is not necessarily fruitful in different segments of market. Therefore be careful while using such strategy.
Just like consumer goods witness ups and downs at different months the same is true with stock market. As some items have their best sales in some particular month, stock market has its best and worst months.
4) The Monday blues
The first day of week is difficult for people and tend have different effect on everyone.For stock market traders as well it is a hard day. Mostly on Monday you wont see market rising and if you are planning to buy a stock then Monday is not a suitable day.
Along with political, economic factors it is important to know about impact of different seasons on market. In order to sustain in market and earn good returns trader use financial advisory services . Also financial advisors can help you in understanding and identifying different patterns of market. This is true market keeps on changing but at different times it offers useful opportunities. It is on us to identify them make proper use of them.