Often in the stock market we heard about smart money, and investors try to look at it. Do you want to learn more about it? then read the full article.
Explanation
Big pocket investors invest money with proper research and lots of understanding who have better knowledge about the stock market or huge money that can change stock price.
also some people have invested more money in stock it can change stock prices later sell it and gets profit from stock.
Who has smart money?
Obviously, big pockeṭ have much more money to invest in the stock market, which can change stock prices.
Also Investing firms like venture capital, successful investors, have a better understanding of the stock market.
Ventures capital or investing frames have that much reached to research properly about stocks. So their investment is more accurate than retail investors.
Also, successful investors have better knowledge about the stock market as they have experience of many years in the stock market.
it is like Huge amounts of money which can change stock prices or have a better understanding of stocks.
Aim to make money more precisely. Either investing more money and earn more money in short term periods or investing with too much money understanding of stock to see the great future of the company.
How to understand smart money entering to the market?
Some points you can check to find :
1. increasing stock price with volume: suddenly increasing stock prices without any news that is the sign of smart money entering to stock. Because smart investors do great research before investing in stocks.
They have proper knowledge about the future of company & stock prices. That why they buy or sell stock earlier before increasing the prices of shares.
As they buy more quantities of shares so the Trading volume of the stocks will increase with price. So suddenly increasing stock price with volume that is the sign of smart money.
2. Check company holding pattern: If it’s entering to stock gradually not suddenly. Then stock price & volume will not increase suddenly. In this time you have to check companies holding patterns.
3. Check delivery percentage: If suddenly increasing delivery percentage of stock that is also a sign of it entering to stock. Because smart money invests with proper future confidence in stock so investing more amount it will increase delivery percentage.
4. Check daily block and bulk deals: you have to check everyday block deal and bulk deal transaction data from the stocks exchange website. check block and bulk deal from nse and bse official website.
Why Retail investors follow smart money?
As it comes with lots of research, proper understanding of the market. That’s why Retail investors following smart money for a good return.
Should you follow this? Yes, You can follow this but you have to understand that your investment capital and big investors capital too much difference. so you can follow this for educational purposes. Because the following anyone blindly is not good. big investor easily managed their money but retails investors cannot do manage their money as big investors do.
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