SHARETIPSINFO >> Articles Directory >>Trading guide – How to make stock market investment profitable
Stock market investment can be profitable to a great extent only when you can trade in stocks that appreciate in market. But the question is how to select that stock. There are so many ways that you can follow to pick up the right stocks to invest and most importantly the right time to invest in that stock. But for that you have to maintain some principles for investing in the stocks. Here we are providing some practical tips that will help you to trade in stocks.
Have a strategy for trading – This is the most crucial aspect from Share market investment. Many investors simply get ruined simply because they did not have a strategy for investing in the stock market and took their investment decisions whimsically. But if you really want to make some profitable stock investments, you should always have a strategy that should be decided on the basis of your portfolio and your objective of stock market investment. For example if you are looking for good return from your investment at a long term then you should invest in the large cap companies and growth stocks. You should invest in the small caps and penny stocks if you have small fund. If you want to earn on a regular basis from your investment and ready to invest for longer period of time then you should always choose the dividend stocks to invest. Apart from the selection of stocks for investment your strategy should also determine range of investment and extent of risk that you can take. These factors should govern your strategy for investing in the stock market for good return.
Choose the right medium for trading – You can either choose to trade offline in the conventional way or you can trade online for investing in the stock market. The conventional way of trading needs you to have a broker to buy and sell stocks at the stock market. You can place your buying and selling request through the broker and pay the brokerage for the service. In online trading you can trade online and place the buying and selling requests yourself through the online trading website. In both the cases you need to have a DP account for trading in stock market and pay the brokerage. Both the processes of trading have their positive and negative sides and you have to choose the medium that is right for you.
Choose the right companies to invest – The most important part for investing in the stock market is to select the stocks for investment. You can expect to have a good return from your investment only if you can select the right stocks that will appreciate in the near future. Though there is no surefire way to predict which stock will rise in the future there are surely some ways to find out the probable gainers of the future. But to do that you need to have access to all the information that are required for analyzing the potential of the company.
For selecting the right stocks to invest there are primarily two methods that are followed by the experts – fundamental analysis and technical analysis. In fundamental analysis the financial potential of the company and the future prospects of the company are judged from different aspects. For determining financial standing of the company you need to consider the earning, debt, revenue of the company. Apart from fundamental analysis the technical analysis of the stocks needs to be done to determine prospect of the stock in the present market scenario. The technical analysis of the stock gives you an idea of the movement of the stock by comparing it previous data.
These are just the basics of stock trading that you should follow to get good return from your investment. Remember that stock market investment has its benefits as well as risks so you need to take your investment decisions quite carefully.
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