Stock Market Trading As Per Newton's Third Law

Stocks: A "stock" is a share in the ownership of a company.

Stocks Market: A place where stocks and bonds are bought and sold. In stock market stocks are bought and sold at the same time respectively by buyer and seller that are generally known as traders. In brief we can say that a stock market / share market is a public market for the trading of company stock and derivatives at an agreed price. In this article I am going to describe how stock market trading is similar to Newtons third law.

Sir Isaac Newton, an English physicist, mathematician, astronomer, natural philosopher, and alchemist, proposed a law which is known as Newton's Third Law.

Newton's Third Law states that "for every action there is an equal and opposite reaction." I think no need to explain this one in much detail, do I?

Similarly, in stock market trading Newtons Third law of trading can be implemented as follows:

For every buying or selling, there must be an equal amount of buyers or sellers on the other side. The stock market is a zero sum game. For every buyer, there must be a seller and for every seller, there must be a buyer. But no one can predict where the final settlement goes, who is profiting from each of their buying and selling. In this current market scenario there is really no such thing as more buyers today than sellers or vice versa. Every trader needs to understand that you can be on the wrong side of the table at anytime and only a sensible portfolio management system can help you go in the long run.

Once you have indulged in share market you must understand how it works. When you read you begin with A-B-C, when you sing you begin with SA-RE-GA-MA, similarly when you are going to invest in share market you should begin with business-company-shares. Before you embark on your journey to invest in stock market, teach yourself how it works exactly.

In order to trade effectively in stock market, you must make a simple plan that determine your goals and needs. This will help you to identify where to invest, how to invest and how much money to invest. In share market, stocks are the main key elements that decide your success in the market by means of profit and loss. Before buying or selling any stocks you should take a deep analysis/researches on the same stocks.

At the last I can assume that all of you will have well understood that, trading is not only pure art, it also has some basic fundamentals of science.

Source azinearticles