July 13, 2024


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Tips for creating the best stock trading strategy in Saudi Arabi

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When it comes to trading stocks in Saudi Arabia, the goal for any investor should be to create a stock trading strategy that maximises their returns while minimising risk. To do this, an experienced investor should utilise a few essential tips:

Research the market

Before making any investment decisions, it is essential to thoroughly research the market and become educated on the various types of investments available in Saudi Arabia. By understanding what types of investments are available and how they may perform under different economic conditions, investors can make more informed decisions on where to allocate resources. Additionally, exploring past trends and predictions on future performance is beneficial to make better-informed decisions concerning which securities are most likely to yield higher returns.

Understand risk tolerance

Understanding risk tolerance before constructing any stock trading strategy and measuring one’s risk tolerance with tools like the Risk Tolerance Quiz before investing is often beneficial. Understanding how much risk one can tolerate makes it easier to create a more effective and successful stock trading strategy that will help maximise returns without exposing oneself to too much financial risk.

Utilise stop-loss orders

Stop-loss orders effectively limit potential losses by setting predetermined levels for when a position should be sold to limit further losses from adverse market conditions. For instance, if an investor buys shares at $20 per share and sets a stop-loss order at $17, the position will automatically be sold if the share price reaches $17 or below, which helps investors limit their losses should a position suddenly trend downwards in value.

Diversify investments

It is important to diversify investments when constructing a stock trading strategy, as this can help reduce risk by spreading it among various types of securities. Different asset classes may perform differently under various market conditions, and having exposure to different assets can help mitigate potential losses associated with particular downturns in specific securities. Additionally, investing broadly across asset classes may provide opportunities for higher returns than would otherwise be possible.

Stay up-to-date on the news

Investors should stay informed of relevant market news and developments that could impact the performance of their investments. Paying attention to news related to the overall market and individual stocks in which one has invested can help investors make more informed decisions about how and when to trade securities. Additionally, staying abreast of any legal or governmental changes that could affect the performance of various investments is essential for successful trading.

The best stocks to buy in Saudi Arabia

There are a variety of top stocks to buy in Saudi Arabia that investors may consider when constructing a stock trading strategy. For example, the Tadawul All Share Index (TASI) is an index of 30 stocks that are among the most liquid and volatile in the country, making them ideal for traders looking to capitalise on short-term movements in the market. Other popular stocks include petrochemical giants like Saudi Basic Industries Corporation (SABIC), Al Rajhi Bank, and National Commercial Bank.

The oil and gas sector may also attract investors looking to capitalise on the continued rise in oil prices. The state-owned company Saudi Aramco is one such company that investors may want to add to their portfolio as it has maintained strong growth and success despite current oil price volatility.

The financial sector could also offer potential opportunities for those willing to take on higher-risk investments. Companies like Samba Financial Group, which owns a majority stake in Jadwa Investment Company, have seen steady growth recently due to the kingdom’s increasing number of foreign investments. Additionally, telecommunications companies such as STC and Mobily have established names within the industry with long histories of reliable performance that could provide long-term stability for a portfolio.


Overall, investors must conduct thorough research before deciding which stocks should be included in their trading strategy. Understanding each security’s fundamental characteristics, such as past performance, current market conditions, and expected prospects, can help investors decide which stocks best suit their needs. Additionally, diversification, risk management, and staying informed are all essential components of a successful trading strategy. By following these tips, investors can increase their chances of creating the best stock trading strategy in Saudi Arabia.