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Top 10 Tips For Stock Market Beginners to Succeed to Make Money in Trades

Here are the top 10 tips for stock market beginners to succeed to make money in trades:

1. Never buy or sell in the stock market based on your emotions. Making random decisions will ensure that you are on the path to failure.

2. Beginners should follow strategies to make money in trades. Famous investors such as Warren Buffett have strategies.

3. Day trading is very volatile so it has extremely high risk. You must have discipline and experience on day trading.

4. Never put all your eggs in one basket. Always diversify your portfolio to minimize the risk of losing money.

5. You need to decide when to sell. You cannot hold onto it even if it keeps rising or if it keeps falling. Many beginners fail to make money in trades because of this problem. Discipline is key to succeed.

6. Get out of a trade fast if you have no idea what is going on. Ignorance leads to failure.

7. It is very risky to trade against the trend. You need a lot of experience to make money like that. For stock market beginners, it is best to stay away from that.

8. Do not listen to people who promise you will become rich if you trade in penny stocks. They are very dangerous, and it is extremely difficult to find people to buy your trades so you might have no one to sell to.

9. Do not rush to make money quick. For beginners, focus on no more than 3 stocks at a same time. You might not be able to follow a plan that works if you have too many to worry about at once.

10. Think of it as getting an education. It takes a while to fully understand everything that has to do with the market. You will win some and you will lose some. It is all part of the process of learning.

How to Invest in a Tough Stock Market

In today’s stock market you need to know why a market can change on a dime and how you can beat the market at it’s own game. The changes in the markets are based on cyclical stocks that are influenced by economic growth commonly known as Gross Domestic Product or GDP growth. Normal economic growth is usually between -2% to 5%. When the economy is running at full speed, at or near 5%, the Federal Reserve will try to slow the economy if inflation seems to be becoming a problem. The only tool the Fed can use to slow the economy is by raising interest rates. Higher rates will slow the economy. This situation exists today. We have a roaring economy and the Fed has increased rates to a level where the economy is slowing down.

Cyclical stocks are stocks that are interest rate sensitive and rise and fall with the rates. Financials, house builders, retailers, auto manufacturing and tech companies are all cyclical in nature. These companies sell items that consumers or businesses will purchase only when the economy is improving or doing very well. Secular stocks are stocks that are not interest rate sensitive. These are the health companies, supermarkets and food companies. Secular companies sell items that people use on a daily basis and don’t need a roaring economy to be purchased.

A tough stock market will be beaten if the companies that are cyclical in nature are sold and secular companies are bought. The strength of the underlying financials are still important, but if strong companies with a long history of good management and quality earnings are purchased, you will be much more likely to earn a profit than with the cyclical stocks that will fall regardless of the strength of management. Because you know when the stock market is changing you can play the proper stocks at the proper time.

One additional tip is needed to produce the most income from your investments. These huge companies with quality management will get beaten down to a level where the growth investors can’t take the pain anymore and will sell to you, the value investor, who is purchasing stocks in companies that will bounce back at much lower prices than normal. These companies will cycle up and down with rates and you can act accordingly to maximize your investment.

13 New Stock Market Trading Tips

Stock market trading tips

  1. Careful selection of trading style: A proper check and analysis on the type of the online trading has to be done on the first hand with respect to where to close every trade when a day finishes. You can also think about a short-term trading, whether you would choose to do the trading weekly or monthly has also to be planned while choosing the trading style. You may feel changing your mind on the trading style in between. So it is always better to select the style of stock trading before you commence the trading activity.
  2. No to over trade: If your trading capacity is Rs. 2, 00,000, it is better to avoid using margin. You can make a choice to trade with 1.5 Lakhs rather than the whole available amount.
  3. Diversify: Portfolio diversification is an ideal technique in trading. You can utilise the option to make investment in different trading sectors.
  4. Buy when vibes are not good: You have to be alert about the stock movements. When you see the decline in the stock value, it is ideal to buy more of them, which is at the time of bad news. So that you need to pay a comparatively lesser price to buy it. The best time to sell these stocks is when there their prices rise. In other words, at the time of good news.
  5. Set realistic targets: You need to be practical in setting your daily targets. A dream of making millions in a single day is beyond practicality. Daily trading with a good patience level can take you to better heights and more profits in stock trading.
  6. Stop loss: It is better to follow stop loss as even though there are chances to lose at times, you can gain experience from a failure for a better success in the future trading.
  7. Strategy: Always make a good strategy for your trading activity. When you set a target, it is always better to wait until you reach the daily target rather than cutting positions before stop loss or make an exit by making minor profits.
  8. Buying at low price and selling stocks at a higher price may be always possible in the stock trading. There can be instances when you have to little compromise on this strategy as it may lead to further new positive outcomes in the stock trading.
  9. When you see a trend when every trader is engaged in buying, it is better to sell at this time. When all are selling, go for buying more stocks.
  10. It is wise to take long positions only in such companies which have a good reputation and strong foundation. For short term trading, you can find stock which can be speculated on a later stage.
  11. Trade the Best Stocks: You need to gain advanced skills and a good research for choosing the superior stocks from the lot. If you are not skilled enough in trading, always seek support and guidance from a professional trader. It is better to avoid huge brokerage companies and mutual funds for this purpose. This is mainly due to the fact that large trading experts usually will not make more money in trading.
  12. For a better success formula, apply stop-loss order. This supports the trader to sell the stock when it declines to a particular price. For instance, when you buy shares of company X at Rs 500 wherein you quote a stop loss price of Rs 495. When the price declines to Rs 495, the automatic sale of shares will occur, so that your loss is only rs.5. The degree of loss that you are able to afford is to be decided prior to entering in to the trade.
  13. Trading is a skill. The do’s and don’ts of it has to be learned before you enter in to trading. You have to acquire knowledge on doing spot amateurs and how to trap the same and take positions. It is ideal to know when to get in and when to get out of the trade. It is better to be quicker in this. One demerit of being an amateur trader is to do the trading at a wrong point. For a skilled trader, it is easier to identify such people and be in the opposite position to trap them.