Many people start stock trading to make good money. However equity trading is not easy for all, despite it, many investors have made a good profit in stock trading. There are some basic principles of trading like one must have discipline, patience, market understanding and research ability.
Indian stock market is quite volatile. This creates confusion among investors regarding their decision to hold or sell stocks. Therefore, there is no tested or proved the formula that can help to achieve desirable success in the share market. However, there are some trading rules that can help to increase chances of success during trading.
1. Follow disciplined approach
If you study the history of the Indian stock market then will find one thing that whenever the stock market goes up suddenly it creates some panic moments for investors. A big number of investors had lost their money when the Indian stock market had a bullish trend. It happened due to the volatile nature of the stock market. On the other hand, some investors who had followed a disciplined approach earned good money. Therefore if you have a long-term trading plan then should use a systematic disciplined approach.
2. Control your emotions
There are numerous investors who have lost their money because they did not control emotions during share trading. Investors invest in share market to make good profit and greed of this they invest in wrong shares. Greed and fear are two factors associated with emotions and these must be controlled during stock trading.
3. Trade with surplus funds
Some investors take the loan and invest in the stock market in the belief that it will return good money that is wrong. The stock market is full pack with up and down. You should not test your skills or luck with debt money. If you are a newcomer in the stock market then it is advised that you should use your surplus money for trading. If you start making the profit then use the same amount to buy other shares.
4. Set realistic goals
Most of the investors set earning goals for invested money. You also can set financial or profit goals during trading but it must be realistic. There is no guarantee that you will get the same return each time. Therefore you must set achievable and realistic financial goals.
5. Avoid herd mentality
Many traders follow herd mentality means they buy or sell a specific share if most of the traders are buying or selling. In such way, they try to go behind majority without their own research. You should avoid such mentality because it will not work in long run. You should do your own research and follow self-trading strategies.
The stock market is one of the best ways to get the good return of invested money but here also you will have to follow some basic rules. If you follow these then can stay in the stock market for a long time because profit and loss are two faces of trading in the Indian share market.
Many investors have been made the good profit, you also can but will have to keep patience and avoid greed during trading.