Saturday, 31 October 2015

How can I start stock trading with little money? What are some key rules that I have to keep in mind while investing?

It's all about your risk profile, your expectations and how well you manage your psychology while trading.

Some of the rules you can look out for, are:-

1. It's not important whether you are right or wrong, more important is, how much you lose when you are wrong and how much you make you are right.

2. Buy a stock when everyone feel it's expensive. Sell when it's extremely expensive & yet everyone finds it attractive.

3. The greatest pain in the financial markets is: "You find something and you could not act on it and it happened as you thought it would."
Take risks, however small they might be. Managing this risk is important.

4. Do not trade in a large number of stocks. It is like being a juggler with too many balls in the air. You don't just drop one, you end up dropping them all.

5. If you are bullish, you'll probably make money. If you are bearish, you'll probably make money. But if you are both, you are likely to fail.

6. In the stock market, almost majority of the time, the crowd is on the wrong side.

7. Don't buy something only because it is 'low priced'

8. Never ever, average your losses. It's a wrong approach.

9. Always cut your losses short and let your profits swell. 

10. Never try to time the market. 

All the very best.

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