SHARETIPSINFO >> Articles Directory >>Investment tips you can use for trading in stock market
Stock market investment is no doubt a profitable proposition but stock trading has its own risk associated with it. But if you can be little careful, you can reduce the risk to significant level while trading in NSE and BSE major stock exchanges of India. Here we are providing some very effective stock investment tips that will minimize your risk as well as help you make good profit from your investment.
- Decide your priority – Before you even start investing in the stock market, you need to decide your objective. That means you should have a clear idea of what you are expecting to get from your investment in the stock market. If you are looking for a regular income from your investment, your investment strategy should be daily trading and short time trades. On the other hand if you want to increase your bottom line over a period of time, long term investments in the large cap stocks should be your priority. So decide on your objectives as that will help you to select the appropriate method of trading and decide on a trading strategy.
- Select the right broker – For investing in the stock market and trade in the stocks you need to have a broker through whom you will buy and sell stocks. For best effective trading and good guidance and market analysis you should always select a trustworthy and reputed broker with proper infrastructure to provide you the right kind of support.
- Have a strategy – To gain at the stock market you need to have a well thought out strategy and you should always stick to that. It will help you to take profitable investment decisions even at the tough time.
- Choose right stocks – This is the key for any stock investment. You need to select the stocks that are most likely to appreciate in the near future.
- Fundamental Research – For selecting the stocks you should carry out fundamental research of the stocks and that should be followed while making the investment. Ideally you should select companies that have low debt, history of making good earning over the past few years, lower P/E ratio and a transparent and business policy.
- Technical analysis – Once you have selected the stocks, you need to do the technical analysis of the stocks to find out the movement of the stock at the stocks market. Through technical analysis of the stocks, it is determined how the stock has moved in the past in the similar scenario. From the graphical presentation, future movement of the stock is predicted.
- Find perfect price level – Decide on the price level at which you should invest in the stock to get the maximum return. The result of the technical analysis will help you in that. If you find out that the stock has crossed the optimum price level for investment, you should restrain from investing in that stock even if it is good one. It is better to wait for the next opportunity for investing in that stock.
- Don’t get biased – You should never get biased about any stock and you should always judge the potential of the stocks by figures and not by emotions.
- Don’t panic – If you have done your research well and know that you have picked up the right stocks, do not get panicked at the rumors.
- Distribute your portfolio evenly – For optimum risk management you should evenly distribute your entire portfolio in different segments. Like invest some of the fund to blue chip stocks for long term, keep some portions of the fund for day trading, have some fund at hand for acting to some really good tips etc.
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