Stock market is a market place where many people tend to either earn or lose money in large numbers. The strategies followed by each people are different. Some people would be interested in earning more profit in short time while others would look for investing for a long-term return. Stock market has high opportunity for getting more return in short term provided if the investment is made wise. Below are some of tips for making a wise investment:
Patience is the key to success in this field. If there is a dip in the share price, then one should not immediately sell the shares. Shares are always tending to rise at some point of time.
1.Buy low and sell high is a simple and powerful concept of share market. Shares should be bought when there is a dip in its value and they should be sold when the share reaches a considerably high amount.
2.Share will always have a fluctuation. None of the share will always go low and always rise. If a share seems to be rising, then it shouldn’t be hold for a long time. A profit should be pre set by the trader and once the share reaches the target, it should be sold. Similarly it shouldn’t be sold if there is a small dip in the price. This type of mistake is mostly committed by most of the traders.
3.A stop loss point should be determined before a share is bought. A target should be set. Usually stop loss is calculated in percentage. For example, if the stop-loss point is set as 5%, then the shareholder should sell the share either if the share price is increased by 5% or decreased by 5%.
4.Trader should follow the market trend carefully. Many online tools provided by many brokerage firms can provide a history. By making use of these tools, there is a possibility for predicting the price of the share. There are also many other factors, which influences this price.
5.Investment should not be made in a single company. It could either amplify the gain or loss to a huge amount. Investments should be made diversified. Diversified investments increase the probability of high profit.
6.The economy and politics of the country have a direct impact on the stock market. Recent changes in the economical activity should be watched carefully. An intelligent trader can easily predict which business will rise by analyzing the economy and current politics of the country. For example, if a government decides to increase the infrastructure of the whole country, then there will be a rise in the construction and cement company’s shares.
7.Many software vendors are available. They provide platform for trading. They also make suggestions on what shares to buy.
8.Trading should not be done when there is a stress. Good trading doesn’t require more than four or five hours a week.
9.The final and the most important tricks are to maintain one’s own portfolio.