Every day millions of shares are traded on the stock exchanges, and therefore it is essential as an investor or trader that you devote time to preparing your moves carefully.
Since share market trading has little association with luck or chance, developing and improving trade skills is necessary.
Let us look at the quickest ten important share market tips and tricks that can enable you to improve your trading skills.
A trading plan is a must
A trading plan is a set of rules that tell you about a trader's entry, exit, and investment criteria on every purchase. It is easy to test a share market trading plan in today's time before risking your money in real-time. Once you have tested the plan developed and it shows good results, that is the time to go full throttle investing in the stock market.
Be a learner
In share market trading, every day is a new day. It would help if you took it as it comes. Be a learner and practice share market trading as a new entrant, even if it has been decades of trading for you. Look at share market trading as a classroom with much to offer and to be taken one thing at a time. At Sharekhan, we are committed towards investor education. Our Sharekhan Classroom is a popular platform designed keeping the current needs of the investors in mind.
Treat it like a Business
First, do not treat share market trading as a hobby or a job. It is serious business here and requires precision, patience, commitment, in-depth analysis and cold-blooded research. Unlike in a hobby, wherein there is no real commitment, trading counts as a lot is involved and committed. At Sharekhan, our research team deep dives into research and analysis to get the best suited stock recommendations for you.
Have technology at your side
Today, technology has changed the way share market trading is performed on the exchanges. Everything is mobile, swift, intelligent and real-time. In such a scenario, a trader must be up-to-date on the happenings in the trading world and use technology to know about stock movements, new products, new trading schemes and pre-empt market movements. At Sharekhan, we prefer to be ahead of time. Our ‘One Click SIP’ is one of the fastest ways to invest in mutual funds at just one click. The Sharekhan App is one of the most sophisticated share market trading platforms. It is tailored to make investing via your smartphone a breeze!
Take risks that you can afford
Knowing one's risk-taking ability is not a discount. Instead, it is a strength. It enables you to plan well and not overexpose yourself to the risks in share market trading. Here comes again the importance of a well-thought-out share market trading plan.
Be open to new strategies
A trading plan is good, but that does not mean you do not evolve or adapt to new trading strategies. Never in stock trading should there be a time that you follow a trading plan that is outdated or rigid to change. Since the trading world is fast-paced, your strategies should also be agile and adaptive.
Do not lose confidence
The key to successful trading is not losing confidence, even in the shakiest economic environments. A failure at the share market trading should not at any time be taken as a personal loss. Instead, it should be taken at all times as a learning experience and a valuable asset to be kept alongside the share market trading journey.
A stop-loss is essential
A stop-loss can help you take off some trading stress. It is a predetermined level of risk a trader is ready to take in stock trading. The stop loss can be in absolute numbers or a percentage. Irrespective of its presentation, it limits a trader's exposure to the bourses and helps in limiting the losses and risks.
Not having a stop loss is a lousy trading practice and should be avoided. It should be a hygiene feature in your trading plan and be exercised diligently in a trading cycle. Remember, exiting a trading cycle with stop loss and eventually having a losing trade is still suitable trading if it falls into your trading plan.
Don't fall for rumours
The trading world has plenty of room for rumours that often even go ahead to represent the trading environment. It is essential to differentiate between what is data and what is rumoured data as a trader. In addition to this, do not fall for feelings or suppositions but facts. All your moves in the stock market should be based on facts and research.
Defend your trading capital
It is vital as a trader that you look at protecting your trading capital. This does not mean you do not take risks at all. However, it would help if you did not take unnecessary risks that could adversely impact your trading capital and overall performance in the stock market.
Share market trading is a long term investment and involves hard work. Traders should have the discipline and patience to follow specific rules while exposing themselves and the capital to stock trading.
Understanding the share market trading tips mentioned above and how they work in cohesion can help traders establish a viable trading business. With over two decades in the business, Sharekhan has been guiding investors in their financial journey and empowering them to enhance their trading skills. Our Roar program is a one-of-its-kind specialised program designed and aimed at helping early investors begin their share market trading journey successfully. An intensive 90-day program, it takes you through the basics of trading and investing skills with the right portfolio assessment. It also provides easy to understand reports and dedicated and trained onboarding managers.