Business

Online Stock Market Trade

If the stock is over-rated (in relation to the investor’s assessment), the order will not be executed. It will wait in the order book until the market will be on a lower level. Conversely, if the stock is under-rated, the order will be executed at a lower price, thus leaving the added benefit of having bought the shares at a price below the current estimate.

This type of order is in fact optimal when the market price is currently too high, but is likely to move down. By making such an order, the investor waits to catch a future decline : when the market price reaches its estimate, the purchase will be triggered. The order will not be executed until the price fluctuations do move below the estimated price, which is a guarantee for the investor.

However, if the Online Stock Market Trade price is lower than the estimated value, the order will be executed immediately at the market price, which provides a gain for the investor, but is not necessarily the optimum for him. If the market was down , the investor waits until the quotation is as low as possible before purchasing.

In this case, he has an interest in placing an order threshold, requesting a purchase if the price rises above the current market price (with a margin), but canceling the order if the price rises above its estimate.

Unlike the previous case, this type of order requires a minimum market monitoring: you must constantly re-adjust to lower the threshold to follow the decline of the action, and buy the action as close as possible minimum before the turnaround. The orders are thus trigger the natural tool for investors who want to make the most of a downtrend (bullish respectively) they consider excessive and beyond the actual value of the share.

That the transaction is actually as close as possible to the extreme, you have to guess if the beginning of the reversal can be seen on the daily price is an intermediate correction, is the beginning of a real turnaround. This type of question has no simple answer.

Market efficiency

The change in the equilibrium price of the stock is exposed to various events. The efficiency hypothesis states that the securities markets are in equilibrium, which are valued at a fair price when their price reflects all publicly available information about each setting and it is impossible that investors will earn the market consistently.

Finance theorists define three forms or levels of market efficiency. The prices are reflected in current market prices. Information on trends in stock prices is not useful. The expected return on capital gains is also constant. The expected total rate of return is equal to the expected dividend yield plus expected growth rate.

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