If you are a stock market trader, it is advisable that you must follow some basic principles. By doing these you can achieve success in day and delivery trading.
1. Virtual stock market trading
It is important that before entering and investing money to stock market, spend some time on virtual stock market trading or paper trading or on stock market trading games. By doing this you will get some trading experience before entering in market. Many brokerages offer virtual stock trading.
2. Put small amount of money first time
If you are trading for the first time or you are not an experienced trader put small amount of money in to market. Then increase the amount very slowly.
3. Make a trading plan
If you want to become a successful trader you must keep a trading plan. You have to do some home work before trading. This include study of chart patterns.
4. Identify the trend of market
It is very important that you identify the right trend of the market before trading or investing. Also try to understand strong and weak sectors.
5. Pick right trading or investing stock for you
Before trading a security, try to pick the right stock for you. It depends upon your trade (intraday or short term)
6. Research about the stock before investing
Now a days it is found that investors are going behind brokerage research and calls. Before following brokerage calls it is strictly advised to do your own research.
7. Keep an eye on important trading levels
Before trading it is important to keep an eye on technical levels like pivot points, camarilla levels, fibonacci retracement levels, wave and Gann levels.
8. Book profits or loss in right time
Keep targets and stop loss for every trade. Book partial profit on all targets. If your trade hits stop loss avoid repeated trade in that direction.
9. Never try to buy a security on a new low
If a security make a new low don't try to buy that security. There may be reasons behind the new decline. Try to buy the stock only on a clear indication of reversal (Rising in price to a specific level).
10. Never try to sell a security on a new high
If a security make a new high don't try to sell that security. There may be reasons behind the new price increase. Try to sell the stock only on a clear indication of reversal(Falling in price to a specific level).
11. Avoid over trading
If you want to be a successful trader you must avoid over trading. It is the best solution to avoid huge losses.
12. Avoid impulsive trading
Traders must avoid impulsive trading. It will result in the loss of large amount of money. If you believe that you made a bad trade you must exit from the trade or keep a strict stop loss to keep the losses small.
13. Alertness is required for day trading
Day trading requires alertness. So is advisable to watch movement of market and scrip from terminal or visual media.
14. Keep a positive attitude
A trader must look on getting profits. But if a particular plan not works for you you must reduce or close positions and watch what is happening. If a trade fails on a day, there is no need to become mood out. Participate in other activities to keep your right mood.
By applying these principles one can easily trade on stock market.
1. Virtual stock market trading
It is important that before entering and investing money to stock market, spend some time on virtual stock market trading or paper trading or on stock market trading games. By doing this you will get some trading experience before entering in market. Many brokerages offer virtual stock trading.
2. Put small amount of money first time
If you are trading for the first time or you are not an experienced trader put small amount of money in to market. Then increase the amount very slowly.
3. Make a trading plan
If you want to become a successful trader you must keep a trading plan. You have to do some home work before trading. This include study of chart patterns.
4. Identify the trend of market
It is very important that you identify the right trend of the market before trading or investing. Also try to understand strong and weak sectors.
5. Pick right trading or investing stock for you
Before trading a security, try to pick the right stock for you. It depends upon your trade (intraday or short term)
6. Research about the stock before investing
Now a days it is found that investors are going behind brokerage research and calls. Before following brokerage calls it is strictly advised to do your own research.
7. Keep an eye on important trading levels
Before trading it is important to keep an eye on technical levels like pivot points, camarilla levels, fibonacci retracement levels, wave and Gann levels.
8. Book profits or loss in right time
Keep targets and stop loss for every trade. Book partial profit on all targets. If your trade hits stop loss avoid repeated trade in that direction.
9. Never try to buy a security on a new low
If a security make a new low don't try to buy that security. There may be reasons behind the new decline. Try to buy the stock only on a clear indication of reversal (Rising in price to a specific level).
10. Never try to sell a security on a new high
If a security make a new high don't try to sell that security. There may be reasons behind the new price increase. Try to sell the stock only on a clear indication of reversal(Falling in price to a specific level).
11. Avoid over trading
If you want to be a successful trader you must avoid over trading. It is the best solution to avoid huge losses.
12. Avoid impulsive trading
Traders must avoid impulsive trading. It will result in the loss of large amount of money. If you believe that you made a bad trade you must exit from the trade or keep a strict stop loss to keep the losses small.
13. Alertness is required for day trading
Day trading requires alertness. So is advisable to watch movement of market and scrip from terminal or visual media.
14. Keep a positive attitude
A trader must look on getting profits. But if a particular plan not works for you you must reduce or close positions and watch what is happening. If a trade fails on a day, there is no need to become mood out. Participate in other activities to keep your right mood.
By applying these principles one can easily trade on stock market.
