Do you want the tips for investing in stock market? Trading/Investing in stocks is something that each of us would like to try once in our lifetime or many of us would have already tried our luck. However, earning more profit from the stock market than the losses is something which very few privileged or lucky ones have been able to achieve.
However, one common trait that has been observed amongst all the gainers is that they have been consistent and diligent in their trading/investment skills. They have formed their own principles and they have stuck to it no matter what the market trend has been. Similarly, they have continuously worked hard and earned the profits (except for a few lucky ones, but I am sure they are very less in numbers).
If you are someone who is interested in the profession of stock market or if you are making your first move in the stock market, here are a few tips as guidelines to help you move forward and succeed.
Tips for Investing in Stock Market:
1. First of all be disciplined and organized. Have your own plan on how you are going to move forward in a stock market and make profits with minimum losses. If you are dedicated and determined to work hard towards your investment, then you will surely earn profits.
2. Learn the ins and out of the trade. Depend less on speculation. Know about the Fundamentals and Technical part of each and every stock, you are investing in.
3. Always have a goal and a time frame while you are learning the trade. This will help you in being more focused.
4. Do your part of the homework before investing your hard earned money. Have a strong base on the fundamental and technical analysis and how to do them for every stock that you pick. Learn tools if you have access to any.
5. Always invest that part of your savings which will not adversely affect your long term plans or your standard of living. Losing all that you have earned discourages you and is a disaster to your money management.
6. Don’t put all your money in a single stock. Likewise don’t invest in multiple stocks of the same domain. Bring variety to your stock picks so that if a single domain fails, you have a hope to profit from the other one.
7. Be an enthusiastic and an educated investor who is updated with all the fundamentals and recent news on the stocks that he/she has invested in. This will help you more in your buying and selling strategy of the stocks. Likewise make yourself familiar with historical data and past news. They will strengthen your understanding more.
8. Read good books and knowledge articles on stock market that you think might elevate your knowledge. Extract great ideas and strategies from them and form your own rules. To start off with books, my recommendation is ‘The Intelligent Investor by Benjamin Graham’ and ‘How to make money in stocks by Wiiliam J ONiel’.
9. Don’t be an emotional investor who would rely too much on a brand that he/she is fascinated by. Be calculative and see how much profit margin a particular stock can fetch you with.
10. Observe the stock market precisely. Try to understand the trend. Analyze when the market is bearish or bullish.
11. If you are a first time investor, you should start investing with a small amount and in the stock that you are much aware of and confident about its profit making. Once you have made first few profits, you will start understanding the trend and gain experience.
12. Don’t be overwhelmed by the experience and the knowledge that others are having in the stock market. Have your own pattern of progress and see what works the best for you. If you have your own targets and you are able to achieve it, it is all that should matter to you.
13. Always make use of the experience that you had when you have earned a profit or suffered a losses. Observe what went right and what went wrong. Implement the profit strategies again and again to make sure that your decisions were not more of speculation and that you understand the trade well. Similarly learn from your losses and try not to repeat them in the future. It is an added advantage to try to learn from others’s losses.
14. You can start off with a virtual practice of trading where you buy and sell your pick up stocks. Observe the trend and your analysis for some time. This will help you in becoming familiar with the market. Once you are confident with your investment strategies, you can then kick start the trading and enjoy the ride.
Note: There are some stock broking agencies and also banks that provide you with the virtual tool to practice the trading. Make use of them at the utmost. They will help you in developing a knack for the trading tool before you actually start investing.
15. Remember you want to invest in stocks because you want to earn a substantial amount of profit apart from your investment. So, you should always invest in such a way that you do not become too greedy and invest all of your profits plus principal. Always save the profits that you have earned from a share and then invest a part of it. Don’t get into the trap of being impulsive.
Similarly, when you see that you are having some losses from your shares, try to minimize it. The best way to minimize your losses is to set a stop loss for each share. Do not fear and face the losses.
16. Take the profession of stock market as seriously as any other profession.
17. Given the volatility of the stock market, understand that it is not all about only profits, no matter how smart you are. Be prepared for losses too.
18. It is good to take suggestions and recommendations from your friends, relatives or your advisors. However, the informed decision should be taken by you after you have done your part of R&D. Do not get swayed away by the recommendation from an analyst or an advisor because they are in the business more than you. Always have a habit of cross-checking your decisions.
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