As everybody knows that the Stock Market is an uncertain niche where anything can happen at any time therefore it is very important for all stock market traders to follow a general routine on a daily basis. This routine includes learning all that is necessary about the market before the bell rings. Because when the market opens it is highly difficult to notice these things.
So, here are the 10 things that a trader should review before the market opens.
1. Update yourself with the national news
The Stock Market has a strong correlation with the national news. A trader should not start trading without having proper knowledge of what is happening around the nation. And it is proven that how nationwide lockdown was strongly correlated with India’s first dip in the stock market. Henceforth, it is important to pick the news, comb through the business pages and national headlines before you start trading.
2. Check on International news as well
International news help to predict certain facts about national companies. For example, a trader can have an idea about Indian export companies through regulatory changes in the International market. A marketer can get an idea about the supply chain through international trade patterns and most importantly international news prompts a lot of queries before the market reopens.
3. Understand key resistance of major indices
Everyday Stock Market draws a different picture of the market. The dynamic price action helps to abstract a lot of information, for example, banking structure of nation, consumer durable or automotive index and so on. This knowledge helps to understand the situation of each sector through their prices.
4. Watch out for major announcements
Major announcements should have an impact on a trader’s portfolio like whether it’s making any changes, inclusions, divestments etc. The dynamic actions lead to making timely entries to form the portfolio before the bells ring.
5. Keep an eye on the delivery percentage of stocks
If any stocks ask for extra trade delivery then it means that the investors are showing interest in those stocks. Henceforth, a trader can identify long term investment opportunities through some fundamental and technical analysis.
6. Keep track of major scientific developments
Any scientific breakthrough triggers a lot of industrial changes. For example, An efficient or cheap mechanism in solar energy can trigger a long term change in the solar energy industry. So, such information is important and critical to understanding how the market will move from here on.
7. Watch out for the major movements within the portfolio
If any stocks in the trader’s portfolio go high or low then it will change the risk composition which means the portfolio needs to get rebalanced. And that is only possible when the trader does the math before the stock market opens so that the risk factor will get reduced.
8. Understand currency market movements
If the national currency exhibits a major gain or loss in relation to foreign markets then it affects the existing economic equilibrium. So, it’s important to understand the currency movement thoroughly.
9. Understand the commodity markets
The commodity market has a very interesting relationship with the stock market. If any company is strongly influenced by the commodity market then the stock price gets influenced too. Even metals like gold or silver can also tell whether the stock market will hit or bounce back in response to the current events.
10. Understand how political events affect the investments
Politics and Market might be on the different pages in the newspaper but in reality, each can affect the other in fundamental ways. For example, if the government introduces any conservative or liberal trade laws or any market rules then the stock market will see some major changes in response. So, it’s important to keep an eye out for any such major talks and understand how the market will respond to such events.
So, these are the basic things that can help the trader to understand the business ecosystem as well as the meaning of the numbers through an informed perspective. Every successful trader checks on various factors before they move into the stock market.