Basic Principles of Stock Market Trading:
Stop Loss: Stop loss is a method to get safe from losing much money. Stop loss is the first and an important rule of trading before buying any share. It helps you to stop your loss. Investors should know to predict and more importantly to execute the stop loss landprime.
To predict and execute stop loss means if the share seems to go down, then point a value to execute stop loss. In this case, after that, if the share price goes more downward, then you won’t be losing more money after stop loss.
Suppose the price of a share is Rs100 and it’s looking that the share price will go down. If you order your stockbroker to stop loss when the share price is Rs90, after that if the share price goes to Rs50 it won’t affect you. Because you have already used stop loss strategy at Rs.9o.
Stop loss is a point where you decide to sell the shares at a particular price to save from future losses.
Practice market and learn to analyze it before getting in: Before investing money or starting trading learn to analyze the market. Analyze and mark the daily changes in the market on paper to understand the market. It will help to be familiar with the market.
It is very important to get familiar with the investment market and its terms. Investment or trading is not just about buying and selling of stocks or shares. Even investment and trading are two different factors of the market.
Start your trading with small investments: Never ever invest much amount for the first time in the market. Start an investment with a small amount so that, in case if you lose the money it won’t affect you that much. Always have backup to get recover from the loss. If you lose all the amount in first investment, then it will affect you so much. After that, it will take a long time for you to get stable again.
Never invest in a sector which you don’t understand: A trader, especially a newbie trader should never trade in a company or sector which he doesn’t understand and not familiar with it. Trading in different sectors has more chances of losing the amount. Although, this market is about risk-taking but always take the risk as much as you can bear.
