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10 dos’ which will aid you to earn money from trading
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So, if you have plunged into the pool of trading or are already trying to get ahead, kudos to the choice! Trading shares, stocks and the like imply that you are aspiring to earn money. Since, finances are of immense significance; this path is bound to pave new milestones for you. However, as much as this course is associated with returning a profit, so, it is lumped together with the risk factor. It is attributed to this aspect that, there is requirement of disciplined and smart choices to make good money.
Before, giving an insight with regards to the tips of the same, it will be interesting to understand what trading is all about!
What is trading?
Trading is purchasing and selling of stocks. When, the stock is sold on the same day, it is called intra-day trading. And, when the stock is held for simply, 2-3 days it implies, swing trade. Yet again, there is positional trading wherein the stock is held for almost 2-3 weeks. In India, the retail investors trade mainly in stock futures and options.
With a plethora of investment options, you require some Do’s which will enable you to earn good money from trading:-
Stop-loss order- In the regime of trading, succeeding in a stop loss order is of significance. It is this phenomenon which will help you to sell a stock when it has slid to a certain price. Yet again, pertaining to this aspect you need to be clear about the amount of loss you are ready to accept.
Skill-trading is a skill. Period! Hence, you have to be really smart to grow your skill, nurture them and utilize it well. You need to be good at fabricating your own position. Needless, to say skill comes with perseverance and knowledge.
Identifying a stock- you need to be smart enough to identify the apt stock and then focus on it. In fact, this is an imperative aspect of planning.
Capital- this is again of significance. When you are out their trading for good gains or making sure you earns good profits, a capital of minimum Rs. 1 lakhs is required. If this capital money amount encourages you to borrow it from someone, it is best to refrain from trading. The money you are planning to put in trading needs to be yours and not a part of your savings. Hence, decide accordingly.
Stock volume-when you are initiating to trade, it should have a minimum daily average volume of 500,000 shares. And mind you, this is the least volume. Anything less than this should not be considered if you want good return from trading.
Price range-it is recommended to go with the share which has a minimum price range of Rs. 10. This implies that the average difference between a stock’s Intraday high and Intraday low should be at least Rs. 10. This will be of benefit to you.
Timings-yeah indeed, the timings of the market is of significance. Hence, when you are planning to trade in Indian stock markets, look for the most volatile market timings. It will enable you a head start and ease out the speculation and process for you.
Stock beta- when you start to trade in the market, it is advisable to have a look at the stock beta of the stock. You will be able to find it in the trading software. For any stock, a positive beta of 1 or above is considered good. In fact, you can feasibly trade in stocks with a maximum beta of 2 or 2.5, but, more than these needs to be avoided.
Supply and demand-the supply and demand of individual stocks matter immensely. And, for you to pursue this with ease, a technical analysis can be of aid.
Average out-if you plan to buy more to average out, the price of the stock which is falling. Do not ever do it. As a professional trade or an amateur it will be a disastrous thing.
So, take care of the above tips and earn more with trades and stocks. Make sure that your investment results in huge profits!
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