How to avoid Common mistake in the Stock Market

16 FEB

Most of trader tends to make a few basic fundamental mistakes while trading in the stock market. They generally end up in losing a few of the money previous to realizing their common mistakes. We will have a look at a few of the common mistakes, so that we can learn to avoid such common situation.

Mistake 1 –Lack of Knowledge for stock market

A lot of people directly begin trading in the stock market. They don’t even difficulty to gather a few fundamental knowledge of the stock market and expect to build money for the one day. You must always know about the fundamentals and basics of the stock market previous to in fact heading into it.

Mistake 2 – Stock trading with borrowed money

Never begin trading in the stock market with the borrowed money in expect that you will return back after making a few good profit. Always begin with your extra money and extra means even if you lose that money, it should not affect you and your families or college life style.

Mistake 3 – Investing all your money at one goes

Remember that you should not invest the entire your trading money in the stock market at one goes. As an alternative you should invest it at definite intervals.

Mistake 4 – Not Realistic expectations from the stock market

A few people begin trading in the stock market with the thoughts that they will become billionaires and millionaires within a small period time. Market trader expects to make enormous profit from the one day and generally end up losing their money in the stock market.

Remember that you should always be clear from the intraday trading that making more money in the stock market needs a few qualities as essential in other aspects of life eg. Intelligence, Patience, Hard work etc.

Mistake 5 – Don’t panic with the bad news

In case of bad news or with an unexpected fall down in the price of stocks a lot of investors or trader begins selling their stocks. Always keep in mind don’t panic with the bad news. Be Careful depth analyze the latest market situation and then take any step.

Mistake 6 –Holding back your worst investment

Don’t hold back your bad investment for a long time with the probability that you will recover your investment with a better time interval. Instead find out of it and use the similar money in a few other stocks.

What is the Intraday Trading?

As the name suggested Intraday trading refers to the stock market trading system where you have to square-off your market trade on the similar day. Squaring off the market trade means that you have to make the sell and buy or buy and sell transaction on the similar day previous to the market closing time. Stock market trader referred day trading is also referred to as Intraday Trading by a lot of traders.

Let’s explain day trading or intraday trading with an example.

Assume that you have parched 100 stocks of QWE limited during the open market hours, and then you have to sell the similar no. of stocks of QWE limited previous to market closure. Similar is the case if you have sold the stocks, you have to purchase the similar quantity of the stock you have sold before market closing.

In online stock trading platforms when you are making an intraday transaction, you have to openly specify that it is an intraday transaction while placing the order. However in case of a purchase transaction you constantly have the option to change it to delivery later previous to the market close.

Mainly online trading platform positions perched under intraday trading are squared off automatically if not done by you previous to the market closure.

Why a lot of traders find intraday trading

Charges of Brokerage for the stocks traded under the segment of intraday trading are very less than the segment of Delivery.

Intraday trading for a high margin is available (eg. If you have Rs.5000 in your account, you will be permitted to do transactions worth various times of this value. This ratio differs as per the policy of the Brokerage firms. A few of the brokerage firms even permit up to 10 times margin)

They don’t want to panic or carry their positions overnight as the stock price may be affected due to a few other events and open with a gap down or gap up the next day.

Better strategies of Intraday Trading –

There are different styles of stock trading followed by the traders for intraday trading.

– A few traders mainly focus on very short term and exit the position once they arrive at the highest level of profit. Such traders generally keep faith on volume of transactions to make an ample profit. They carry out various purchases and sell stock market trades and sometimes exit the position within minutes.

-A few traders keep faith with the market trend for intraday trading and usually are lots of patients and make less transaction.

-Some traders resort to Intraday trading only in the case of the few major events when a picky stock is supposed to move up or fall down based on some event.

Difference b/w buying stocks on the basis of intraday and Basis of Delivery

– If you have parched 50 stocks of a few company on the basis of delivery, these stocks will be transferred to your Demat Account (generally it takes 2-3 days to entire the transfer) and you can do anything you would like with the stocks. You can sell them the next week or keep them for 5 years.

– In stock market intraday trading stocks are not truly transferred to your account and you have to square off your previous position to the market close on similar day.

Intraday Trading for Beginner trader

A lot of beginner trader in the stock market gets intraday trading a smart option and look this as an opportunity to earn a few fast bucks on a daily basis.

Intraday trading is not as easy as it sounds. Making more profits in intraday trading on a daily basis is not that simple task, it requires much hard work and good discipline we are giving the best stock advisory company he will provide Stock Tips, MCX Tips and Option Tips. What are your views on this – “Whether a beginner in the stock market should option to intraday trading or not”.

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