Last updated on July 2, 2021
Hundreds of thousands of people try their luck on stock markets every day but most of them leave empty handed. Though there is no limitation in terms of profit one can book by trading in stocks, most of these folks walk away losing their money and never exploited their full potential. Most of them have one thing is common; they haven’t learned the skills required to turn the odds in their favor. However, if one puts enough time to learn stock trading, it’s possible to be on the way to increasing one’s chances of attaining success.
In most cases, people try to pretend themselves as investors and put all their eggs in one basket. This increases their likelihood of facing losses. Similarly, there are many other mistakes they commit while investing in stock markets.
So, if you are ready to learn stock trading, it is suggested to take a strategic approach to it. There is no point in beating the bush when you can do it in an improved way. So, let’s start and learn how to excel in stock trading.
Start by doing a self-test that determines your relationship with money. Do you consider life as a struggle, with an extreme effort needed to earn money? Do you think personal charisma will attract market prosperity to you in the same way it does in other life chases? More worryingly, have you lost money on a daily basis through other activities and hope the financial markets will take you a bit leniently?
The secret to success in stock trading primarily lies in the time and effort you give to it. The more time you spend on learning and practicing, the better results you can expect to get. Here is a step-by-step guide on stock trading.
- Get a trading account
Though it is very basic, but it is certainly the first and foremost requirement to become a trader or investor. Choose one of the best stock brokers in India and get the one that matches well to your budget and trading needs. From its trading platform to brokerage, customer support, available packages, check everything before you move ahead with account opening. You can also make the use of free trading tools and research advisory services to seek more clarity in this regard.
- Pursue a stock trading course
Financial posts, stock market publications, website blogs, etc. There’s loads of information available outside and much of it cheap to grasp. It’s significant not to focus too barely on one single feature of the trading scenario. Rather, study every aspect from market point of view, including thoughts and notions you don’t think are predominantly pertinent at this moment. Trading commences a journey that sometimes terminates at an unexpected place. Your comprehensive and thorough market experience will come useful over and over again, even if you think you know precisely where you’re heading right now.
You can choose to explore following books for more knowledge of stock markets.
- A Beginner’s Guide to the Stock Market – Matthew R. Kratter
- The Only Investment Guide You’ll Ever Need – Andrew Tobias
- The Modern Guide to Stock Market Investing For Teens – Alan John
- Broke Financial – Erin Lowry
- Trading For A Living – Dr. Alexander Elder
You can start by sparing some for stock market understanding every day. Get up early and discover more about overnight price action on foreign markets. There are lots of good websites that provide easy to use and readily available information. Visit them on a daily basis and go through market information available there. Spot on latest news, Sensex movement and others.
- Learn to analyze
Try to understand the fundamentals of technical analysis and price charts. You may ponder basic analysis offers a clear path to profits because it checks growth curves and revenue streams, but traders live and die by price action that deviates acutely from primary rudiments. Do not stop reading company worksheets as they provide a trading competence over those who disregard them. However, they won’t help you endure your initial year as a trader.
Your knowledge of charts and technical analysis can help you learn the art of price forecast. Hypothetically, securities can only go upper or lower, heartening a long-side trade or a short auction. Actually, prices can do lots of other things, including cutting sideways for weeks at a time or whipsawing pugnaciously in both ways, trembling buyers and sellers.
- Practice trading
The next thing to do is the real thing – trade. Be it paper trading or virtual trading, both would help you keep a check on regular market activities. It typically involves the utilization of a stock market simulator that exhibits the look and feel of a real stock exchange’s activity. you can even practice trading on best trading app in India.
So, when do you switch to real trading with actual money? There’s no right answer because simulated trading presents an error that’s probable to show up whenever you begin to trade for real, even if your paper results appear faultless.
- Understand risk management
Once ready and playing with real money, it’s time to master position and risk management. Each position transmits a holding period and technical strictures that favor profit and loss targets, asking for your timely departure when attained. Now consider the mental and logistical stresses when you’re holding three to five positions at one point of time, with some poignant in your favor while others charge in the opposite way. Luckily, there’s enough time to master all features of trade management, as long as you don’t overload yourself with excessive amounts of information.
Commence your stock trading voyage by gaining a lot of information about stock markets like price prediction, chart analysis, market analysis, price actions, and trading strategies, among others. Do proper practice alongside all these elements before jumping the bandwagon. Then, try with real money in real market to increase your likelihood of getting awesome results.