Basic Rules of Stock Trading

Category: Education

Presentation Description

The lure of big money has always thrown investors into the lap of stock markets. However, making money in equities is not easy. It not only requires oodles of patience and discipline, but also a great deal of research and a sound understanding of the market, among others. Here are basic rules which can help you to invest safely in stock market.


Presentation Transcript

Welcome To Dhanashri Academy:

Welcome To Dhanashri Academy

Basic Rules of Stock Trading:

Basic Rules of Stock Trading If you’re going to trade in stock, adhere to some golden rules to help you maximize your success (or at least minimize your potential losses):

Don’t commit all your cash at once::

Don’t commit all your cash at once: 3 In a fast-moving market, opportunities come up all the time. Try to keep some cash on hand to take advantage of those opportunities.

Have a plan::

Have a plan: 4 Try to have predetermined points at which you cut losses or take profits.

Understand that taking profits is not a sin::

Understand that taking profits is not a sin: 5 Sometimes, a bird in the hand is worth two in the bush. Markets can reverse fairly quickly. If you have a stock position sitting there with a fat profit, it can’t hurt to take the profit. This action gives you cash for the next opportunity.

Discover hedging techniques: :

Discover hedging techniques:  6 Just because you’re bullish doesn’t mean that you can’t also put on a bearish position. Hedging techniques protect you when the market moves against you.

Find out which events move markets::

Find out which events move markets: 7 Research the market and discover what types of events tend to move it. Serious short-term traders keep one eye on their positions and the other on what’s going on in the world.

Check the stock’s trading history::

Check the stock’s trading history: 8 Charts and related data tell you how a particular stock has moved in recent weeks, months, and years. Do you see any seasonality or reliable patterns that may help you judge future movements?

Minimize transaction costs::

Minimize transaction costs: 9 Keep in mind that because trading is typically active and short-term, transaction costs are significant. Therefore, traders who trade frequently should shop around for brokerage firms that charge low commissions.

Read and learn from top traders: :

Read and learn from top traders:  10 Last (but not least), learn from the great ones out there, such as the legendary Jesse Livermore.


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