Trading tips to secure better returns

Many a time people buy stocks on their friends or relatives recommendation to make quick money and wait for days or sometimes months, just to recover the cost. Those who are in share market term trading as a risky game but if one it plays smartly he can earn enough money.

Many investors enter in stock market thinking they will make a lot of money and that too in a very short time. But as everyone knows there are no free lunches. Trading is a game which requires forming the strategy with a disciplined approach.

Many traders make money and many lose money too and you should know if trading activities suit you or not depending on your financial position.

Even when one gets trading tips, its execution is important. It is said trading is simple, but not easy. One has to be disciplined in his approach.

     

Discipline in trading cannot be overstressed. In most cases when people are making money, it is their greed for more that makes them wait instead of booking profits. When the market takes downturn it is fear that makes them sell fast. These circumstances can be avoided if you know when to book profit/loss. We have discussed a few trading habits and skills that will help you stay on the right track.

Discipline – While entering the trade one should be clear on the stop-lossvalue of the share, and follow it in a disciplined manner. Depending on the volatility of the share one can keep the stop loss at 5 or 10 percent.

Skills – While trading one should know what to do and what not to do. Trading is basically a skill to know when to get in (enter) and when to get out (exit) trades.

Planning – Proper planning is a must. One should concentrate only on few stocks and plan at what value one has to buy, decide a stop loss, and at what value one should sell.

Capital – For a meaningful trade one should have sufficient capital to invest in stocks. The capital that one invests should be owned and not the borrowed one. Though traders can trade with less capital but volumes and return also count. Minimum capital should be INR 3 to 5 lakhs.

Price range – One should prefer shares the difference on which in an intraday high – low should be INR 10. It is not useful buying shares which has high volumes and not much price movements.

Timings – With reference to Indian context the best time to trade is 9:30 to 11:30. It is observed that during this time, the market is most volatile.

Supply and demand – The value of stock changes with the supply and demand of the individual stocks. If the number of shares up for sale is more than one should not buy the stock and vice versa. To know if the sell quantity is more or buy quantity is more one can identify by performing a technical analysis of each individual share company.

News – Never trade on news that is out in the market. A stock price adjusts to the news within few minutes and later on, they return to their normal.

Charts – There are technical charts and fundamental analysis which should be studied minutely. It gives out many clues regarding the direction of the market.

If you wish to trade and want tips regarding how most probably the market will behave, you can contact us.