investment to any level of financial success requires both hard work and smart work. Understanding how the markets function and how you can exploit them for profit is one part of the puzzle, but so too is knowing how and when to invest for best results, and the techniques and strategies used by successful traders to earn their bread. For those who make smarter investments, potentially more significant rewards lie in wait, and the smarter you can be in the markets, the luckier you can hope to become. So what is the difference between a smart investment and a run-of-the-mill investment, and what are the processes and procedures for making sure you’re taking the right option, every time?

Research the Markets

The smartest trading decisions always begin with the most effective research into the markets, the companies and their performance, as well as analysis of pricing data and previous market results. Trading without research is like trying to play golf with a blindfold. You need to uncover and interpret what’s going on in and around your investment markets to the extent where you feel comfortable as a near-expert in the latest events, results and affairs. Think academic standard – the more you know, the better placed you’ll be to make solid decisions, so getting more market savvy and current affairs sharp will definitely help with your potential trading success.

What Are the Objectives?

You can’t make a solid investment decisions if you don’t have predefined objectives, namely the extent of the return you’re looking to achieve and the timeframe over which you intent to achieve it. This ties in with the strategy you are using, and setting objectives and targets on a per trade basis is conditional on the approach you’re using to maximise market returns. Establishing these metrics gives you a basis for comparing different opportunities and a means for weighing up which represents a better opportunity for investment over the other. Only by setting objectives and aiming to satisfy them with your trading decisions can you expect to be more realistic in your forecasts and in your ability to derive a trading profit.

When Is the Price Right?

Price analysis is another core element of successful investment, and one that aims to answer that age old question – when is the price right? Traders are generally looking for stocks that are under-priced or that are showing strong signs of future growth with a view to early investment. In many cases, the price becomes right as soon as traders can establish that there is a trend in progress in a particular direction, from which they can hope to benefit through a growth in the value of their holding. Similarly, when trends show signs of slowing, it might be advisable to consider selling positions in order to maximise take before a full-blown reversal. Determining the right price for investment comes with experience and skilled interpretation of pricing data, and the smartest trades are invariably those executed with impeccable timing.

How to Behave around Trends?

Trends are what smart investing is all about, and if you can identify trends in a market and get involved early enough, you can ride the full extent of the trend curve to generate significant returns. Identifying trends is usually a process intrinsically linked with price data, but other factors can be weighed in to help to form opinions about potential future trends and markets that could enjoy a marked growth or slump. Smart investors realise that trends deliver returns, so it pays to make sure you’re always on the right side of them, and identify these trends as the valuable money making tools they can be.