What I am Studying After Market Closing: Essential Techniques for Revisiting Your Trades

As the market closes, there is a vast sea of opportunities and lessons to explore. This period is crucial for an investor or trader to conduct a thorough post-market analysis and reflection. Let’s delve into the essential techniques that can transform your trading skills and investment strategies.

Key Points to Consider Post Market Closing

The first and foremost task is to review your day trade, regardless of the outcome—in other words, focus on how events transpired, not just why. This introspection helps to identify your responses, decision-making processes, and identify areas for improvement.

Technical and Fundamental Analysis

Post-market, there are several critical aspects to analyze:

Volume Analysis

Volume is a significant metric to consider. The trading volume of a particular stock can provide useful insights into its market behavior. A substantial volume during the trading day can be a key indicator that the stock is experiencing meaningful trading activity. Even more, a price-volume analysis over a longer period, such as weeks or months, holds a strong position in technical analysis. This analysis helps to gauge the stock’s trend, momentum, and strength.

Deliverable Quantity

Deliverable quantity, another critical factor, reflects the total number of shares a trader or investor has successfully sold and received payment for. Higher deliverable quantities suggest strong demand and validate the stock’s value at that price point. This metric is invaluable in assessing the market’s sentiment and the stock's intrinsic worth.

Open Interest

Open interest is a key technical indicator that reveals the number of open contracts in a particular futures or options contract. This number can indicate the level of traders' and investors' interest in a security or market. It's a crucial factor to watch, especially for those involved in derivatives trading. For further insights, you can refer to Investopedia - Sharper Insight. Smarter Investing.

News and Information

Keeping a close eye on news and information related to individual stocks is equally important. Any positive or negative news can significantly impact a stock's price and performance. Being well-informed about these developments helps you to make more informed trading decisions. Regularly checking financial news sources, industry publications, and company announcements can provide valuable context and insights.

Chart and Industry Analysis

Beyond the specific stock, it is beneficial to analyze the broader market context. Chart analysis can provide valuable trends and patterns, while market benchmark analysis offers a framework to compare relative performance. Additionally, industry news and trends can reveal underlying factors that may influence stock prices.

Mastering Mistakes and Embracing Long-Term Investing

Post-market analysis is not just about reviewing trades; it is also an opportunity to learn from mistakes. Spend time analyzing what went wrong and how you can avoid similar pitfalls in the future. This reflective practice will help you grow as an investor. Furthermore, consider adopting a long-term investment strategy to stabilize your portfolio and reduce volatility. Here’s a tip: holding two demat accounts—one for long-term investments and another for intraday trades—can help manage your resources more effectively.

Conclusion

In conclusion, the period after market hours offers a wealth of opportunities for valuable analysis and learning. By focusing on technical and fundamental analysis, staying informed about relevant news, and incorporating industry trends, you can enhance your trading skills and make more informed decisions. Happy investing!