The Indian stock market has long been known as one of the most rewarding investment options. While several seasoned investors have made it big in the stock market, things are not very easy for beginners. Check out this post to know five stock market tips that even professional investors rely upon.
While a large number of people would like to invest in the Indian stock market, the high level of risk and volatility often discourages new investors. People who somehow gather up the courage to dip their toes in this potentially rewarding world of stocks often suffer from losses. Such beginners then further contribute to the popularity of the myth that says stock investing/trading is nothing more than gambling.
To help you begin on a more profitable note, here is a list of 5 popular stock market strategies which even professional investors rely upon-
- Be a Trader or an Investor?
To start building your stock market strategy, the first thing that you need to know is the difference between a stock investor and a stock trader. A stock investor would select fundamentally sound companies and remain invested in them for several months and even years.
A trader, on the other hand, would mostly focus on the technical aspects of a share and take positions for a few hours or a few days. While both investors and traders are looking for profits, there are significant differences in their research and strategies. Understanding the difference and picking a side is the starting point of being a savvy stock market participant.
- Understand Fundamental Analysis
If stock investing is what you have selected, you will definitely need to sharpen your fundamental analysis skills. While there are thousands of online portals where you can find a list of promising stocks for investment, it is better to rely on your own research and analysis.
Following the herd mentality often backfires in the stock market. So, try to understand what fundamental analysis is and try to do things on your own to be able to pick stocks that have a promising future.
- Technical Analysis is a Must for Stock Traders
If you are not very patient and cannot hold a stock for years, stock trading can be an option for you. As compared to investing, intraday or short-term trading is known to be more volatile and risky. You should understand technical analysis, including chart patterns, volume tracking, technical tools, etc. to develop your trading skills.
Make sure that you start with a small amount if stock trading is what you select and pick the stockbroker carefully as the trading platform will play a crucial role in the process.
- Learn Money Management
One of the most important aspects of being a successful stock market investor or trader is having excellent money management skills. In simple words, money management is a statistical methodology for evaluating how much money you can risk on a trade or investment to your total capital.
Even if you have acquired a lot of knowledge and have worked really hard for several months, things can fall apart if you are not able to smartly manage your money.
- Eliminate the Emotional Barrier
For a share market beginner, it is also essential to work on their emotions. Most people struggle when it comes to accepting the fact that they have made a wrong trading or investment decision. They keep on holding loss-making positions believing that it will somehow miraculously turn around some day. However, this rarely happens.
You should be open to accepting your mistakes and closing such positions as quickly as possible. Even successful traders and investors make mistakes and exiting such positions on time has a lot to do with their success.
Winning the Indian Stock Market
There is no denying that stock market is a risky investment. It is wrong to believe that stock market means easy money as it takes a lot of time, learning, patience, and practice to develop your knowledge and skills that can help you succeed.
Keep the tips mentioned above in mind if you are interested in the stock market and want to ensure that you belong to the group that can make consistent profits.
