InvestorQ : Is it really so important for traders to keep their ears to the ground?
Sam Eswaran made post

Is it really so important for traders to keep their ears to the ground?

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Ria Jain answered.
2 years ago

When it comes to trading, the opportunities can be extremely fleeting. Trading is about the small and intermittent opportunities that present themselves from time to time. There are a lot of benefits in a trader keeping his ear to the ground. You can pick up that some promoter is unable to service the loan and his shares are likely to be sold in the market. For example, in the IL&FS case, the news of likely defaults in IL&FS were doing the rounds for quite some time. Similarly, problems at Dewan Housing had also been spoken about for quite some time. That is a good opportunity to short the stock. Similarly, you may be observing that a particular stock is showing consistent accumulation in the futures market. Alternatively, institutions or some business groups may be consistently accumulating it. How do you ratify your belief in the stock? The best way is to keep your ear to the ground. You are likely to pick up a tip-off in the midst of a conversation among traders. More likely you are going to get to know that the company has either got a huge order or is to report a sharp increase in earnings in the next quarter. For a trader, this can actually be the difference between a moderate profit and a healthy profit.