Trading shares involves a lot of tools and techniques. Most traders build strategies and thoroughly watch the chart to trade and profit. However, one of the prominent things every trader lays their eyes on is the top gainers and losers.
What are these and how can you trade in shares using the top gainers and top losers? Let’s find out!
What are Gainers and Losers?
"Gainers" normally refer to stocks that have a higher price at the close of the market than the opening price.
Whereas, a share that loses its value during the trading day is known as a "loser." It usually refers to the shares that opened at a higher price at the start of the trading day but closed at a lower trading price.
In case the stock market indices fall, then it's an indication that there are more losers in the stock market than gainers. And conversely, when the indices rise, then it's an indication that there are more gainers than losers.
The National Stock Exchange of India (NSE) publishes the list of top gainers and losers for each trading day in the stock market. These are expressed both in percentage and absolute terms. While top gainers are arranged in descending order from the most gainer to the least gainer, top losers are arranged in ascending order from the top loser to the least loser.
How to Trade Using the Top Gainer and Loser List?
The top gainer and loser list can be used for trading in shares as it allows you to get quick snapshots of the stocks that are doing well and those that aren’t. They show the stocks that give the maximum positive momentum and the ones with the most negative momentum in the market.
However, the price movement is not seen in isolation but it also considers the volume of the trade. This shows that the movement of the stock is more reliable.
While the gainers and losers in the stock are updated on a real-time basis, you can filter the same over different time frames. For instance, you can list out gainers and losers on a weekly, monthly or yearly basis as well. This will help you make important trading decisions.
It needs to be understood that the top gainers and top losers should not be considered singularly over a single trading day. Their past performance and movements are equally important. However, the gainers and losers list of a particular day or period highlights the stock that can be tracked to know which stocks to invest in.
Takeaways
Following was the importance of the top gainers and losers while trading in the live stock market. From highlighting the stock that shows positive or negative movement to showing the performance of the stock over a particular period, top gainers and losers are a trader’s important list.
Disclaimer: This article is not an investment advice piece. Trading and investing in the securities market carries risk. Please do your due diligence or consult a trained financial professional before investing.
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