Stock Market Terminology for Beginners
What are the strategies required to trade successfully?
Strategies are more important than the objective of your trading or what size your trading account is. This is necessary to boost the odds at succeeding in the Indian stock market.
Some of the trading strategies that can be adopted are as follows:
Adopt a trading plan:
The plan is a set of regulations that fix on the trader’s entry, exit and money management criteria.
Technological that is adopted is more necessary to analyze the plan chosen right from opening the trading account.
Sticking on to a specific plan viable is more important. It is considered as poor trading if trading is carried outside the plan.
Consider trading like commerce:
Expenses, taxes, losses and indecision are all part of trading. There is no regular pay like a job. Stress and risk is involved in trading. Hence, when treated as business, the focal point would be to capitalize on prospective earning on research-based strategies.
Leaning everyday is essential for a trader.
Update on a wide range of things that impact the ever-changing market.
Understanding the past and current markets buy using right resources will equip you to take the right decisions and calculative risks.
Trade only if sufficient fund is available after your commitments.
Maintain a stop loss at all times
A “stop loss” is a pre-defined amount of risk that a trader is willing to accept for any given trade.
Stop loss could be set as a currency amount or as a percentage of your trade.
By placing a stop loss, you will be limiting your exposure during trading.
In order to make close accurate calls, following the spread of high and low prices traded is very useful in signifying entry and exit points for trades.
Minimize on brokerage
If you do not trade often, holding out investments or long-term stock holding comes with the added advantage of even zero brokerage charges at any given time.
In Contrarian trading strategy, you buy assets that are doing poorly and then sell when they do well. Selecting the ones that do not perform well has to be picked up with an unfair fall in price.
Amidst good intention, ineffective trading or poor clumping to preparation may happen on occasions. Whatever strategy is adopted, it is necessary to know when and where to stop. This would help to take appropriate decisions before continuing. This pattern will also help you invest and trade smartly.