Investing in stocks is a savings game. To conduct each game you need to know and follow the established rules and regulations. Means any violation, you are punished. The punishment is commensurate with the seriousness of the violations of the rules.
Navigation is also easy through the calm sea waters. Apart from the vast knowledge you possess about stock investing, the prerequisite is that you need to deal with issues related to buying and selling with a calm mind. Let him fully understand that your emotions have no role to play when you are dealing with the ups and downs of an exchange. Even in the regular market, they have no role. When you are not in the proper state of mind, you make the decision to trade at the worst possible moment.
Fear and greed combined with emotions is a bad scenario an investor can create for himself.
Some points to consider before trading stocks are:
1. First of all, don’t go with your killer instinct. Look for modest returns.
2. Adopt the tactic of long-term returns. Invest the same amount of money at regular intervals and buy mini lots. Naturally, you will buy more stocks when prices are low and less when prices are high.
3. Take advantage of the broker’s services. Before communicating with him, meet him face to face in his office. Have an initial discussion about your financial goals. Obtain a copy of the company’s commission schedule. Decide what kind of services you need from the broker. You may need recommendations, research reports, and investment advice.
4. Once you start engaging a particular broker, provide the correct information about your goals, personal finances, net worth, and past investment experiences. This will enable the mediator to make the right decisions for you.
5. Now you have reached the pivot point. Who will control the decision making in your trades? You specifically provide in writing that the mediator is the authority to make decisions, if such an arrangement works for you. Once you give this power to the mediator, he or she will make decisions without consulting you. Those decisions will be what is best for you under the prevailing circumstances. Whether you suffer losses or gain profits on a particular trade is not the business of the broker. Therefore, the discretion should be given after very careful consideration when you are fully convinced of the broker’s ability and past records of success.
6. Never invest in a stock that you have no knowledge of and avoid guesswork. Learn basic financial terms and investment basics.
7. You invest to make profits, not to lose money. At the same time, you need to know that stock investments are always associated with a certain degree of risk.
8. The company’s past performance does not guarantee future success. Don’t make hasty investment decisions based on the strength of a salesperson’s resume. He’s doing his job, please do yours!
9. Be careful about catchphrases that are often used in stock trading, such as “inside information,” “confidential leak,” “acquisition is imminent,” “dynamic product,” etc. Your money can never double in six months as promised by many!
10. Do your best to minimize transactions. The more transactions, the higher the commission you will pay.
11. Don’t focus on one product. Let your portfolio take care of different sectors of the industry.
12. In general, there are four types of investment strategies: the fundamental approach, the psychological approach, the academic approach, and the selective approach. Each approach requires detailed study. Keep your knowledge updated about these strategies and you may have to change your strategies depending on the conditions and fluctuations in the market.
You will develop as a good investor gradually with your experience and theoretical knowledge. Both are important. Never lose focus and deviate from tracks while investing. Years of hard work and profit can be canceled out with one wrong trade.