Share Market Online Trading – Capital Gains and Capital Losses

When you are involved in share market online trading chances are that you might be making profits or losses. When you sell your assets for a profit you are making capital profit. When you sell your assets for loss you are making a capital loss. The excess of assets will carry over to the following financial year. The carry over is considered to be a short term loss in the financial calculation.

Types of Term Losses

You have to get used to several patterns of term profits and losses. You should know industrial trading situations like:

• Net long term gain with net long term losses
• Net long term gain with net long term profits
• Net short term gain with net long term gain
• If there are no short term action then it can be reported as long term loss

All of the above jargon's can sound Greek and Latin in the beginning; however, with experience you will be accustomed to the different terminologies and concepts that you have to think through in the trading process.

Smart and Simple Order Specifications

A bit of if, then, else… thoughts about market situations will help you make smart orders with smart specifications. Secure execution of orders is very important to avoid losses. If you add specification in your orders with details about how you expect your order to be completed, you will be avoiding majority of losses. For example, if you want to sell an asset or buy an asset, you might have specific rates in your mind which you are happy about. You can state the price at which you want to buy a share or the price at which you want to sell a share with the specific expiry detail you wish to pitch in for the trade. If the market conditions do not show up with the kind of conditions you might have you do not want to have your trade executed. When you specify all the details, your order will be executed only when the market conditions are correct.

Make More Money

In share market online trading the four popular methods of specifying your orders are like via Limit orders, market orders, stop orders, and stop limit orders. How you interact with the stock market really matters. The way you interact will help you make more money.

Market Makers

You should learn about what the market makers of the stock you are dealing with are keen about. Be clear about the bid and ask prices you are willing to trade at. You need not really follow the market makers and their style of trade, but it helps to know what they are up to, because they set the trend and set the buying and selling attitude in the market being holders of major stocks. It is important to note that market makers actually land up being obliged to buy stocks when no one actually wants it too. So, it is important to use your discrimination on whether to follow market makers or not.