People have been trading in the stock market for many decades. The drive has always been about making big gains. However, a big percentage of the traders always end up making loses instead of profits. If you are one of the people looking forward to trading in the stock market, then you should probably consider the following top 7 trading secrets:
1. Avoid Emotions When Trading
As a trader you have to acknowledge the fact that the stock market is a ruthless market. It never takes sides. When you decide to trade always put all your emotions behind you and use logic and wit when trading. Forget about disheartening your broker. At the end of the day, it is your money at risk.
2. Minimize trading between noon and 2pm
Most active trading takes place at the start of the day and a few hours before the day ends. The more quantity traded, the higher the chance of making profits. Avoid trading between 12 o’clock and in the afternoon. This period usually experiences a lot of lull hence minimal trading taking place.
3. Have a Trade Ceiling
Never be swayed by the market. Always have a pre-planned strategy with a set ceiling price. This is one of the fundamental rules of the stock exchange. Traders who go with an open mind or strategy are usually at risk. Even if the market is looking vibrant, always walk away when your price is exceeded.
4. Take Calculated Risks
Although trading stock is usually a matter of chance, it is possible to minimize the risks. This can be done by gathering information such as the previous day or week’s trading. The economic or political situation of a country, and also the monetary policy will also influence the stocks. Such information helps in speculating with a higher degree of accuracy.
5. Diversity Your Risks
Rule of thumb when trading is never put all your eggs in one basket. Investing in different stocks portfolios cancels out any losses that may be incurred. However, avoid over diversification, this makes it a challenge to monitor each stock individually.
6. Do not Trust Every Word Your Broker Tells You
Most of the trading involves a stock broker or agent. His work is to guide you on which stock to bid or put. But you should also remember that he makes a cut from the quantities traded. He also increases your expenses through brokerage fees, and commissions. If you can avoid a broker, you will have saved yourself the additional expenses.
7. Enroll In Online Trading Courses
The stock market has become very dynamic. Unlike the earlier days, modern trading happens around the clock. New products are always being introduced into the market. In order to remain abreast with the latest developments, you should consider enrolling in an online trading course.
Many people have made huge gains from the market. In fact, some people make their living from the stock exchange. Better technology has made it easy to trade online via stocks such as Emini futures, Binary options, and much more. However, it always pays to visit the physical stock market to get first hand information. May be it is high time you had your passport renewal done on time in preparation to visiting a physical stock market before investing your hard earned money.