Sunday, July 1, 2007

Strategies to make money with shares

hi

today we will know some strategies for share business
here are two ways to make money with shares
these techniques are very useful for the beginners
1. Buy low and sell high
2. Sell high and buy low

both sounds similar na ???
but they actually are different strategies to be employed

1. Buy low and sell high
most of us will be aware of this !!
this is the basic of making a profit ... even from ur school mathematics ...
the Cost Price must be less and ur Selling Price must be high !!
buy the shares that seems to be of less in price but will rise sooner or later !!
then .. as the time comes sell them and make the profit !!
this is the buy low and sell high principle

2. Sell high and buy low
it is just like the previous one where the CP is lesser and the SP is greater
but the principle here is different one ...
the shares u think will go down are to be sold ( simply like u own them )
later as they goes down ... u buy the shares of the sold quantity
actually it is here at this point u buy the shares ...
so .. the SP - CP = Profit !!!
the technique is so tricky ..
if u make ur bid on a winning share ... u eventually has to give the share for more price than wat u will be buying

its not easy to understand this ...
we will make out through an example :

1. Shares worth 100 are already with me ... i mean i bought them ...
now the share value rises to 10 rupees each ...
so .. i sell all my shares and make a profit ... this is buy low and sell high

2. I hear a news that the xyz corporation shares will go down by this week ...
so i call a broker and make an agreement like selling the shares to another party ...
which i dont have with me !! ( u need to give the shares in a week anyway ) ...
now .. as the shares now go down .. i buy them and give it to the broker for the other customer ..
now .. the strategy here is ...
i already sell a pile of shares for some current value that is going down .. but i buy the shares with the down price !!
so .. i make some profit ...


both these strategies are for the beginners and hope the information was useful !!
in coming weeks we will see how to choose the winning shares over the losing one !!
and other strategies that make real money !!

but all that we need is good investment ..
people who can invest money can use the techniques mentioned here

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