Most of the people in India they have a fear in their mind regarding stock market the main reason behind this is of loosing entire capital. This share market is having kind of attraction which wont go easily if its gets in to you. So need to follow some rules to be successful in this. In this article What is the key to success in the stock market? we will provide you with detailed answer. Stay tuned.
10 Key factors to be successful in Stock market
If you heard the name of Warren Buffett, Rakesh Jhunjhunwala, Radhakishan Damani, Vijay Kedia etc., do you now how they become successful in stock market by investing in savings accounts? No. says by Robert G. Allen. Investing your hard-earned money in FD, saving bank account is safety but it gives you the less interest. On the other hand, it is not guaranteed that stocks give you the 100% return for your capital. But if you done Fundamental and Technical analysis it will helps you to become succeed.
If you want to take this stock market for short term or stock trading as a full-time career you need to follow these without fail.
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Protect your capital
The main key factor to become successful in your trading journey is to protect your hard-earned money without proper knowledge if you do trade you lost your entire capital. That you cannot get it back. Don’t invest all your money in one basket diversify that money into various types.
Ex: If you have 100000 Rs, only 1/10th can be deployed.
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Treat trading as a business
In any business sometimes you are in loss and sometimes you are in profit like this way in trading also you have experienced about the profit and losses. Most of the business demand for the customers depend on the seasons like raincoat umbrella business, firecrackers business, juice centre, ice-cream parlour etc., in stock market also many of the stocks will be falling or rising it is because of the seasons.
Trading business is a business which helps you get a clear picture about your expense and losses. This helps to reduce risk, uncertainty, stress etc., Traders who realize there in the risk management begin to focus on productivity.
Always try to take less profit like 1% or 2% of your capital per month. This will become double of Fixed deposit per year. Once you get hold , then you can increase profit.
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Learn as a student
Students beginning step is to study hard without having the intension to make money in the future. While you are studying you have given 20 to 25years to your studies .so this way at least if you gave 1 to 2 years to stock market learning will helps you to make money. Nothing happens in one or two days; you gave your time and efforts to this.
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Risk only what you can afford to lose
If you are capable of taking risk then only invest in stocks. Don’t invest emergency money like school fees ,rent for house etc., Losing money is the part of trading only when you taking risk then you get the reward.
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Follow stop loss order method
Here stoploss means limit investors losses, for long term investors it is not essential to put stoploss order but for swing and intraday traders strictly follow the stoploss order either he/she can lose their entire money. For next trade they do not having the money they put the from their bank account.
Zerodha a brokerage firm explained this with proper scenario. Kindly check.
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FOMO
When it comes to fear of missing out (FOMO) it can happens when there is a big rally or newly surfaced exciting opportunity that has a lot of buzz. If an investor is feeling anxious or regretful because others are making money on an investment’s price movement and they’re not, this cause FOMO.
Fomo in trading makes you either buy a stock at over values price or to sell at undervalue.
Here the investors buy and sell the shares without any strategies and buy the share at the high price. This way of trades can often be riskier.
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Traders should know when not take any trades
In trading not taking trades is save your money this doesn’t means that you should not take any trades. Stress, indiscipline, poor habits can contribute to this problem. A trader should know when to take a break don’t jump immediately. A famous word says that ‘’The more you trade the less you keep’’.
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Organize your personal life
Your personal well-being influences your trading results. To improve your decision-making and overall trading performance, you should maintain balance, maintain stress, do meditation and ensure a healthy lifestyle. So, before opening a trade, make sure you don’t have distracting thoughts in your mind.
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Learn from your losses.
Not only came to the stock market with the intension of making money first step is for learning. Most of your trades in loss put proper stoploss order otherwise it can be create a huge loss to you. Learning is the process without learning you cannot become successful in stock market.
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Keep long term goals
Warren Buffett says that ‘’As an investor, your holding period has to be forever’’. When you make long term goals in stock then only it can create a wealth.
In India, companies like Infosys, Bharti, Hero Honda etc., (not for recommendation) all for a long time before generating normal profits for investors. That is where a clear long-term plan comes in picture.
Conclusion
To conclude these the main 10 key factors will guide you to set as a guideline, to became master in trading is not happens in a single day you have to be dedicated and set proper rules and follow that rules without discipline a person cannot achieve anything. continues learning and willingness to adopt the new changes will guides you to become succeeded. Now a days many more fraudulent activities are happening in stock market sector don’t commit for that.
FAQ
- What is the number one rule in day trading?
Effective risk management takes major step in trading. Implementing stop-loss orders to limit potential losses and maintaining discipline with the entry and exit points are fundamental strategies for successful day trading.
- What is the mantra for success in trading?
‘’I trust my analysis and stick to my trading plan with confidence’’. I am patient and wait for the right opportunities to present themselves. I manage the emotions; I am protecting my capital and take proper risk.
- Which chart pattern is helpful for trading?
As a beginner main step is to study the chart patterns. Each candles represent a specific timeframe and display opening ,high ,low ,closing of prices.