7 Day Trading Tips You Should Know About

Capital or stock market provides the highest return on stocks that are held for a sufficiently long period. The second part is what the media does not highlight while screaming from the rooftops about how people make money on the stock market. And it is ignorance of this fact that makes people invest blindly and lose their hard earned wealth.

What you forget when you buy a stock is that you are now part of this work and, just as in any business you will be sharing the profits and losses. When the company makes a profit, you can earn a share of the profits. When the company loses, you will lose some part of your money. This makes investing in stocks risky, but there is no way out of it.

Here are some useful information that will help you understand the trading better. Also, a few day trading tips for a safe investment in shares, while maximizing your return.

1.The stock price may fluctuate in the short term:

When a company issues a share, certain face value is attached to the share. When these shares are traded, their value goes up or down, depending on supply and demand in the market. This value is called the share price. When there is high demand for trading, this price goes up, and vice versa. When the media reports that the stock market is going up or down, it's the share price of the stocks available on the market that has gone down. As an investor, you should not lose heart. The stock prices of good companies will always get back to the price they are worth.

3.Don't pick tops or bottoms

In case you want a sure shot way to make profits, try to choose when the trend is at its end. There are many indicators that give an idea on when the trend may be coming to an end. However, the statistics may be wrong more than they are right. So exercising caution is recommended.

4.Be long-term investor:

Buying low and selling high is the best way to make money on the stock market. Buy stocks in a bear market, when stock prices have gone down. Sell on the market where Sensex is going up. It is impossible to predict in which direction the market will go. Therefore, when you invest, you have to stay long in the market. In the meantime, continue to sell only a small number of shares frequently and book profits if you think that you will get a good price.

5.Enter trades at low risk, high probability areas

The best way I have found to reduce the risks and maximize the rewards is entering into business, when the risk is low. Some traders refer to this as "trend trading".

6.Decide on how much you can afford to lose:

Never forget the fact that everything that gives you more yields also carries a significant amount of risk. So invest only the amount you can afford to lose. If you are young, have no obligations and have a regular job, you can invest a substantial amount in shares. However, if you're nearing retirement or have dependents or debts, reduce your tendency of taking risks.

7.Create trading plan and stick to it.

Successful traders have a plan. Without a plan, both new and experienced marketers can easily lose thousands a day. It is also necessary to have a good financial plan in place with trading objectives and constraints.

Beware of the hot day trading tips by brokers:

Avoid purchasing shares of a strange and unfamiliar company. Avoid following "hot day trading tips" from the brokers that usually turn cold as they reach you. Do your own research. Read the audited income statement of the company. It can give you plenty of information on the future prospects of the company. Understanding the concepts of earnings per share (EPS) and price / earnings ratio (PE) can also be useful.

at 6:16 PM
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