BlogCapital Market

Trading For Starters

By March 4, 2016 No Comments

by Lourdes Miranda.
Trading seems hard and is hard anyways. It always seems inevitable that starters, whether they have done an investment banking course in India or not, have a huge cringe to jump into riskier investments way too soon. The best solution is to test the waters before you jump in. But the truth is trading is hard and most of the times at least 85% of short term traders fail.

  1. Primary Objective: Make Money

The first and your primary objective should always be making money. You should always place a trade only if you have done a thorough research on the market.

  1. Diversify your risk:

Never ever put too much money into one equity. Start small and diversify your risks. You can increase the size and amount of your portfolio gradually as you become more confident.

  1. Understand your risk appetite:

It is great to take risks but understand your risk appetite.  Be comfortable with the amount involved in a transaction. If you don’t think before making a decision, you will immediately feel the pressure from the fear of an loss will which you cant afford.

  1. Check yourself:

If you have gained a profit on a previous trade and made multiple profits, it does not mean that you are more likely to make a profit on your next trade. Increase your leverage only if needed to or if you are sure about the same.

  1. Think carefully, don’t be rash:

Never take rash decisions. A stop-loss will force you to your exit levels and will assist you when the time comes to cut your losses. But, nevertheless be ready for losses.

  1. Research on your own. Don’t always depend on others.

It will very important to have your own opinion about every trade, in order that you execute it confidently. Doing a financial analyst course could help.

  1. Before making a decision:

Read company reports. They should be good and relevant enough.
Check out financial websites and understand fundamentals and historical charts.
Go through the many reasons that may affect the trade, economic indicators or announcements.
Never be afraid to ask a question, when you are new to trading. The easiest way to learn more about trading is to consult professionals.

  1. Know when you should sell:

Everyone considers buying a stock. You must understand the best time to sell. Plan ahead. Know your stop loss.  Get out of that investment before it is too late.
Happy Trading!!!
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