Stocks are one sure shot of making money if you are able to pick up the right ones at the right time and exit at the opportune time. One of the major mistakes people make is that get emotionally attached to their investment and fail to see the market trends to exit. Just remember that stock trading is an art and the sooner you master it the better it is for you and your finances. Let us have a look at some of the nuances of stock trading and ho you can start in the right earnest.
Stock trading refers to buying or selling of stocks either for the purpose of holding it over short term, medium term or long term. You may also be a day trader where you take a very short term horizon of the market movement of securities and thus take a short term bet. In both these cases, you expect the market to move as per your expectations and thus make a killing in the process.
If you are a long term player, stock trading will involve opening an investment account with a broking outfit and placing your orders to buy or sell with him. You will need to make a initial deposit with your broker to take care of margin requirements and other obligations. The broker will buy or sell securities as per your directions and transfer your securities to your account. If you have given the mandate to your broker to manage your portfolio then broker will be using his discretion to trade on your account based on your investment objectives and suitability.
If you are a day trader, the risk factor would be high as far as your stock trading strategy is concerned. This is because of the fact that you would not be taking any delivery of securities at the end of the day and simply closing out your position whatever be the price. Short term day trading is not every one’s cup of tea and may require constant monitoring of securities and their prices and strategies to exit even at a loss so as to cut losses. Yu may like to place stop loss orders in the system so that your orders are automatically executed if market moves too much against your expectations. It is better to cut losses the sit on heavy losses which you may fine difficult to bear.
Stock trading offers great opportunities to make money if you have right attitude and sense of investment. People world over have made money by adopting different trading strategy in stock trading. You too can benefit from the same if you learn a few basic lessons of investment and then take a right decision. Stock trading is also a way to learn the way markets operate in real time. Thus you an devote time doing mock trading before full fledged operations. This way, you can anticipate what to expect when you are actually faced with the prospect of doing the trading in stocks and derivatives in the real time environment.