Wednesday, October 22, 2014

Top Twenty investment principles for beginners traders in stock market

                         stock market investment principles 

                             major stock market investment principles

Every stock has a specific trend over the period of time so you may observe sometimes few of the stocks have broad scope to increase but the majority of stocks may not move further instead of it, it will fall sharply so how we need to understand the stocks and market. Here are some basic points need to be understood before investing on various stocks.

           principles are listed below

1) Is the stock fundamentally good?
 2) Is the stock technically better?
 3) is the stock following any trend or news?
 4) whether the stock is moving against expectations? find out reasons if yes?
 5) Further company commitments or orders towards clients (future improvement)
 6) checking that whether the stock already reached the destination
7) understanding the breakout points
 8) Deliverable quantity whether increased or decreasing
 9) keep Book profits or losses for reducing more risk
10) understand yourself that whether you are a day trader or short term or long term investor.
11) keep stop loss, if you want to trade on day trading
12) diversify your investment especially in short term or long term in order to minimize risk.
13) always try to book profits around 15% on investment, if you still expect more than that then you are inviting more risk so in-fact takes a long time to achieve your targets.
14) estimate brokerage on every trade you do on investment. remember brokerage changes for day trading and Deliverable trade.
15) Generally, people make mistake by investing less money but taking a high margin on investment so it leads losses once the stock fallows reverse trend against your bought price so a) take less margin on your investment b) book small profits c) keep a stop loss on your view ( not given by expert)
16) Buy every stock on low and sell on high this formula need to be followed by everyone.
17) Try to avoid short selling if your not an expert on the stock market because there is only limited time to cover your position before ending the session. I personally suggest not do so many trades in a day.
18) short selling is too dangerous because generally, people prepare to invest their money by accepting an uncontrollable risk.
19) don't fallow any advice given by any one of them even friends or relatives so and so because self-analysis is necessary while investing money , even a person doesn't have knowledge on stock market then take most expert advice go for long term investment and diversify your investment , do analysis at least every 6 months once.
20) don't fallow the crowd on market but the crowd should fallow you.

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