Stock market is a market for the trading of company stock, other securities, and derivatives. The size of the 'stock market' is estimated at about $51 trillion. The world derivatives market has been estimated at about $480 trillion 'face' or nominal value.Before trading the stocks are listed on stock exchanges which are entities specialized in the business of bringing buyers and sellers of stocks and securities together.
You can start your carrier as a Stock Trader because stock market is one of the most important sources for companies to raise money. This allows businesses to go public, or raise additional capital for expansion. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities and gain profit. This is an attractive feature of investing in stocks.
Following important points may be considered before investment/trading in Stock Market to minimize risk:-
- Find out intrinsic value of stock through fundamental analysis.
- Follow Quarter-by-Quarter results, at least for last three quarters.
- Look for higher EPS (Earning per share) scrip.
- Always keep a reasonable stop loss.
- Try to diversify investment instead of investing in one scrip.
- Always buy in Crash, Panic Selling & exit in Hype, Rumors.
- Buy or investment for longer period.
- Best way to invest is to invest in small quantity regularly.
- Avoid Speculation Buy or Sell.
The rate of failure for a new trader is high in Stock Market. We give some major reason bellow for your notice.
- Poor Skills for trading in Stock Market.
- Lack of adequate capital
- Setting unrealistic targets and goals
- Lack of Patience
- Lack of discipline
- Taking high risk without reason.
If we look at the list, it becomes apparent that the failure is as a result of trading without having in place a proper Trading System and a Trading Plan– One that includes mind training, quality Stock Market education and strategies and sound money management rules.
If you want to a Successful Trader then you have to develop a character of successful trader. The main points you have to follow are
- Adequate trading knowledge and understanding. You should seek services of good quality mentors and a trading guide.
- Adequate capital – Don’t be fooled that you can earn thousands every week from a starting capital of 5000.00
- Realistic Goals – don’t expect 100% profit each month, because simply it is not possible.
- Have patience – don’t trade if you don’t have to. You should wait for a set-up according to your trading plan and system.
- Have Discipline to follow your rules
- Understanding and Managing Risk
And lastly the most important is having a Trading System and a Trading Plan. Virtually 90% of Traders have never had one!
Disclaimer: Any action you choose to take in the markets is totally your own responsibility. I will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information.
