Trading in the Share Market is becoming more and more popular day by day all over the world. People believe that investing in shares will yield better returns than depositing in a
bank. It is believed that in future more people will participate in share trading. It can really be a good source of extra income to every one if they follow certain simple tips given in this article.
1. Understand the risk involved: First and foremost thing you should know about share trading is that it is subject to market risk. You may be an expert; still there is a certain degree of risk involved in share trading.
2. You should invest in stocks only if you have savings or spare money. In other words you should invest in shares only if you can afford to lose in the event there are any uncommon and unexpected fluctuations in the stock market.
3. You should invest in shares that are fundamentally strong, also known as blue chip shares.
4. Always be careful to invest only a portion of the allotted money initially (say about 20%) and keep the balance for future investments in the event there is a crash in the market.
5. You should divide your money and invest in a few sectors which are presently doing well, and envisage that will also do well in future.
6. Fix a target to book the profit and loss. (Say about 15%for profit and 5% for loss).
7. You should strictly follow the rule to book the profits and losses; never yield to temptations to carry on further.
8. Be prepared for market crashes. When it does, do not panic or worry. You should boldly invest on fundamentally strong shares.
9. Watch the market; regularly update your knowledge with the current trends of financial and economical changes in the country.
10. Never invest blindly just because a friend or a broker suggests. You need to do a bit of research yourself before investing your hard earned money in shares.
Happy stock trading.