The most common and important factor that grips the investors of the stock market and make them lose money is IGNORANCE. Most of the people who are investing are not aware of the various aspects related to it. That is precisely why it is such a dreaded thing to venture and lose all the money in stocks.
If you are new to investing in stock market and you want to be aware of some stock market basics, then read further and there are some tips that can help you choose the strategy that you are going to follow in order to succeed.
Research the market as it is the most crucial thing to understand. You need to have a plan and determine your course of action accordingly. I know that you have heard about learning as you invest, however, it is very important to know what you are getting into.
You have to compare and weigh your options properly and decide the companies and the kind of investment plan that appeals to you. The options could be numerous and may be overwhelming for a smart investor too.
Take help from an expert in the beginning as it is not a joke and the money you are trying to invest was earned by working all those Sundays and late nights.
Learn here- Research tools from Finalaya
2. Exit strategy
Gone are the days when a stock market investor was seen as some wizard from the planet Mars. It is now the average Joe and Tom who are pumping their money into stocks and their stakes are high and knowledge low.
Most people do not know when to sell the stocks and they keep waiting for it to go higher and higher and one fine morning they suddenly realize that they are in LOSS. There are various plans and exit strategies propounded by the finance wizards that could be of great use to you. Choose a plan and follow it. After all, they made millions following the same plans and never lost big money, they may be making sense.
3. Trailing stop strategy
You must have a ‘trailing stop strategy’. Make maximum profits when the stocks are rising and the moment you feel that they are about to crash, withdraw all the funds and do not wait for the crash to take place. Sell them 25% off their highs.
Do not compare the mid day figures, compare the end of the day figures before the market closes and if you see them falling, sell them first thing the next day!
5. Start with Low Risk
Do not invest big money in one go. Get a hang of the market mechanisms no matter what a great magician you are with figures. You think I doubt your capability? No, I don’t! Just play safe and avoid regretting in future. Start with low risk and go high later.
6. Do not get involved emotionally.
“The best investor is the emotionless investor”.
Money cannot be dealt with emotions and no matter how great your returns have been with that company; you need to have an exit strategy in place in case it starts falling. Any company can fall and rise and be ready all the time.
These are some basic things to be kept in mind and if you have the confidence to suffer some small losses, then go ahead and make profits as the opportunities are numerous.
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