Bad news: making money in stock market is not easy.
Good news: you can be a successful stock market investor.
Making money from stock market requires not only patience and discipline but also a great amount of research and in-depth knowledge of the market.
There is no sure shot formula has yet been discovered for success in stock market. There are a lot of opportunities in the market, you just need patience and knowledge. Invest only after complete analysis of company’s fundamentals. No need to follow anyone blindly including me. Identify multibagger stocks before anyone else. Grab it before it’s become expensive.
Based on my experience with the stock market, here are few suggestions if you want to follow.
- Don’t emotionally attached with your trade.
- Don’t short any share when it’s in the life high or 52 weeks high.
- Don’t assume less PE stocks are always a good buy.
- Don’t assume high PE stocks are always a bad buy.
- Don’t invest all your money into single share/sector.
- Don’t ever short share in day trading.
- Don’t assume there are defined targets/ stop losses.
- If you have lose the huge amount of money in stock market, it is certain that you can earn it back from the share market. (Provided you have a good knowledge)
- Don’t assume huge debt companies are always bad.
- There are several factors basis which one should invest in stock market.
- Nothing is better than the practical knowledge of the market, as fundamentals can go wrong sometimes when biggies are selling in huge volumes.
- Placing stop loss is a smart decision to save yourself from huge losses.
- Review your portfolio at regular intervals. (Reviewing doesn’t mean to check it on mobile app daily)
- Be patience and don’t be a compulsive investor. The stock market is not going anywhere. You will get several chances in Future as well.
- Don’t ever rush to book profit. You may lose profit.
- Don’t follow news/ rumors, rather do your research before investing.
- Try your hands on the stock market simulator until the time you feel comfortable and confident.
- Beware of the people who are interested in brokerage and thus gives you tips.
- Most dangerous trading is short selling/ buying in day trading.
- I recommend you to have at least a basic knowledge of stock market before starting off.
- Don’t ever trade in a panic situation.
- Never invest on the basis of life high price versus current price.
- Don’t compare your trade/returns with others.
- No one is perfect in this domain, everyone has made a mistake once in a life.
- Buy on rumors and sell on news.
- Be professional and exit your trade immediately.
- If your stock is fundamentally strong, you don’t have to worry about its going down at certain times.
- There are few operators in the market who may fluctuate stock price for their benefit.
- Averaging stock price doesn’t always help as we don’t know what is the bottom price.
- Trade with your money which you don’t need at least for one year.
- Mutual fund investment is also a good way of entering the stock market.
- Don’t confuse insurance with investment. Both have a different purpose.
- It’s good to book losses at the right time rather than not booking it at all.
- Bulk deal or block deals doesn’t give any full proof indication about buying/sell.
- Trading in futures is not for small /common people.
- Find stocks which are performing very well but are not famous.
- The market is supreme, we may learn a new thing every day. There is no one recipe.
- Avoid stocks where promotor’s stake is less than 25%.
- Don’t exit stock just because of one bad quarterly result.
- If you have limited money and want to make quick money, go for options trading to limit your losses.