Stock market has the power to make you both wealthy and bankrupt. There are list of things which you should never do and should always keep in mind. Here they are –
Never Believe in others
This is the first and foremost no, not only in stock market but in any business. If you cant believe in yourself, stop stock market trading. Remember, education won’t make you a great trader, experience will. And experience comes from mistakes. The only thing you got to keep doing is believing in yourself.
Never Believe in Rumors
There are times when you might have read an article or heard from a friend or saw an opinion which may be against the position you have taken in the market. Never ever believe them. At the end of the day, they are humans, not God. So till the time you yourself are not convinced of something, don’t ever take a trade or make a decision.
Never depend on other’s research
If you are a trader, you got to have knowledge about the way a stock market works. If you don’t have then you have two options – either stop trading or learn the way people trade. There are zillions of books, videos and study material available on the net that can help you learn.
Secondly, don’t ever depend on others’ research. It may ruin you completely. Always do your own research. If you don’t know the methods, again Google them, use YouTube videos, do paper trading till the time you gain confidence. And then and only then use your research while trading.
Always use a Stop Loss – Strictly
As a trader, your first responsibility is not to make profits but it is protect your capital. Hence, it is highly important that you use a Stop Loss strictly. Stop Loss is a method that will help your capital suffer losses to the minimum.
To know more about it read here – https://analyzingstockmarkets.com/2017/06/27/stop-loss-how-to-determine/
Never be greedy – book profits continuously
Your second responsibility after protecting your capital is booking profits. Now, never wait for the price to hit your targets completely. Start booking profits in between, keeping a trailing Stop Loss, so that in an event of sudden fall your capital sees profit with minimum losses.
Buy Reliance @ 1320 – Target Rs 1400, SL – Rs 1300
Book 50% when Reliance hits Rs 1370 and Shift your Stop Loss to Rs 1340
Book the remaining around your target or at a point where it is facing maximum resistance.
The above rules are easier said than done. But with persistence, practice and dedication it can be done. And it will make you are successful trade in the future.