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Trade is a Science

 

December 28, 2020 (Investorideas.com Newswire) In this century, this is a known fact that science is involved in everything there is and everything there ever will be. Businesses are no different. The study of business science is a vast field where people learn how they will take the first step in their professional life. They learn ways to scale their livelihood for a better lifestyle.

Trading is a business and you cannot be successful until you treat it as such. The reason a lot of newbie traders do not get profitable results and lose a lot of money is the fact that they think trading is easy and anyone can trade successfully without having any plan or a strategy. Finmaxfx.com is a platform that understands this necessity and thus provides its traders with educational material which will better equip them to learn the strategies that they will need.

How are Science and Trading connected

The very basic thing that is an absolute must if you are trading, especially if you are a stock trader, is the study of graphs. For a newbie it just looks a strange graph that is always fluctuating but for a trader, these graphs are his bread and butter and is a huge factor which has a big effect on his trading sessions and strategies.

This fluctuating graphs shows the performance of a company and how their shares are being perceived in the market. This also shows what the investors and buyers think regarding this company. There are also a lot of factors involved which can bring about significant changes in these graphs.

Photo by Myriam Jessier on Unsplash

Emotional science plays a big factor in trading because how people perceive a specific company will determine what the company share prices will be. Let's say that a notable company official resigns out of nowhere, this will create an air of uncertainty and one thing that the market hates is uncertainty. An incident like this is almost guaranteed to cause a drop in the shares of that company.

Another example can be a natural disaster or any type of a big hit to the company reputation or its resources. For example, a warehouse fire or a storm. These things usually cause a price drop in company shares as lesser people invest during these times and the stock holders look to sell out their stocks.

Look What is Happening around You

These things tell us that a trader should be good with not only in analytical science but also keep a close eye on the emotional trend of the market towards the stocks he is willing to trade on. Keep an eye out for the things happening in the markets and what the economic environment is hinting towards.

We all know the infamous incident of the Black Thursday in 1929 which started the Great Depression, one of the biggest stock market crashes in history. And then there is the incident of Joseph Kennedy, who sold all of his stocks just a day before the biggest crash of the time. Hundreds of investors lost money but Kennedy said that he got a tip from a boy who polishes shoes for a living.

It was a time of when the stock markets were prospering, but Joseph thought that if a shoeshine boy can own stocks, there must be something terribly wrong.

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