Stock Trading is today a buzzword in every household and office. People from all strata of the society are getting involved in stock trading. Everyone wants to gain some easy profit by trading stocks in the market. But is it really that easy? Perhaps it isn’t. Stock trading requires enormous amount of research, planning and strategizing before you can even earn minimal profits. Stock trading is like swimming or cycling, it can be very taxing at first, but once you get the flow it becomes easier and you can in fact make some good profits out of it.
Be Patient
If Tyler Darden was to say it, the three virtues of a successful online stock trading are patience, patience and patience. It is the most needed quality of a stock trader at any level of trading and in any situation. If you want to become a profitable stock trader this is the one thing that you cannot do without. You have to be persistent in pursuit of your goals and must not be affected by the tides going against you. You must be able to learn out of your mistakes and be ready to change your strategies if you find it necessary.
Do your research
The beginning of the career of a successful trader begins with educating oneself with the proper knowledge of the technical details in the field or else you might be left wondering what has a bull and a bear got to do in the stock market. One must research well before attempting anything in the real market. There are various virtual stock markets that can help you learn the basics of stock trading. The knowledge of the market conditions is also very important before you enter the market. You must be well-versed about the recent trends in the market and should know which stock has more credibility.
Plan your strategy
The next important step towards becoming a profitable trader is proper planning. Planning involves creating policies describing what sort of short-term strategies you would be using to achieve a long-term goal. This would be the foundation of your career for the foreseeable future because without a suitable plan you will most certainly find yourself at a loss. Detailed planning like what indicators you would be using and what settings of chart you would be referring during trading activities is necessary. You must also plan what would be the quantity and value of stocks you trade and the entry exit strategy. This would decide your profit or loss margin. It is very important that you make the plans based on your research and what you think would suit you best. You can achieve profit only when you stick to your plan with fervor almost characteristic of right wing radicals!
Keep yourself updated
To bring your plans and aspiration to fruition you must always be updated about the latest trends in the market. It is therefore extremely important that you invest not only your money but also your time in finding the right information. There are many information providers and analysts available online and otherwise for you to avail their services. It is always advisable that you consider and contemplate over the information by yourself before trading.If you have the right information about your stock which is updated and unsophisticated, then you can make calculated predictions which have more probability of yielding results. Make the best guess to gain the most. So it would be preferable that you are familiar with these information systems. It can come only after practice. Trading without proper knowledge and information is risky and in all chances you would be thrown out of the market before it even starts making any sense. Note that patience is very important here, as you will have to invest a lot of time in understanding how to correlate information with profit.
Follow the trend
A simple rule while trading is to follow the trend.Trends are strong indicators of what should be done. It is very dangerous to go against the trend. Traders often incur huge losses when going against the trend. Cautious exceptions can be made if you feel and know that the trends are going to change or reverse soon. In such cases you might make huge profits but remember that you are risking too much and if your predictions turn out to be wrong then losses would often be unimaginable.
Stick to your Stop Loss and Targets
Decide your stop loss price as well as your profit margin. Holding onto a stock thinking that the price will increase later on will only make you end up in more loss. It is therefore advisable to have a definite stop loss price. This is the price at which you will sell the stock no matter whatever you feel would happen next. Similarly you have to decide a profit margin at which you would sell your stock. Even if you feel that the prices are going to increase further, once you have reached the set profit margin you should sell your stock. This is a minimum risk policy as you decide what your loss or profit is. If you don’t adhere to your profit margin or stop loss price then you might end up in unfortunate situation. Also you should be careful about using your capital. If you are not economical while using your portfolio, your entire capital might get wiped off before you know it.
Keep your emotions at bay
Your emotions are an important factor that can make you or break you. Traders are often overwhelmed by emotions during market activities. So never ever underestimate the power of your emotions. Emotions can make you do things in seconds that thinking would take days. So do not trust your emotions while trading, it can get very treacherous. Greed is a very common emotion that can overcome you and your well researched plans. Whatever happens, a trader must be emotionally stable and should not waver away from his/her plans and strategies.
Becoming a profitable stock trader is a dream cherished by many and it is not difficult to realize this either. All it requires is patience and persistency. A trader never gives into emotions or prejudiced judgments. Successful stock trading evolves from following one trading style. Determination is always a pre-requisite to make profits in the long run. A trader must never enter the market in doubts. Greed and fear are perilous paths and must be avoided at all costs.
Do your research, plan your strategy, adhere to your plans, wait patiently for your moment and be the success you always wanted to be.
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