Equity trading is not a game. The stock market is something you can never estimate. You might gain good profits or can even incur huge losses. Hence, it is advised to know the basics and risks associated with it before you start trading in the stock market. Listed below are a few things that you need to keep in mind before investing in the share market.
- Expect Realistically
Avoid trading with unrealistic expectations. For instance, one opens a trading account with a starting capital of Rs 1,00,000 with a brokerage firm. Expecting to make 20-25% of the profit from the first month would be impractical. Trading is like a business, which demands patience and must be done with practical expectations only. - Avoid Overtrading
If you start to trade with impractical expectations, you are likely to make mistakes and end up with a failure. As a result, you start to feel restless and trade excessively to make up for the loss. Even a seasoned trader cannot be sure of achieving success every time he/she trades and so overtrading must be avoided. - Control the urge of Trading
It is noticed many a times that if the trader wins, he/she keeps on trading even more out of greed. Trading is a peculiar business and it is not obligatory to trade every possible day to make consistent money from it. If planned properly, even one or two trades a week can get you a lot of profit. To control your urge of trading is another important BSE trading tip that you need to keep in mind while trading. - Follow Stricter Risk Management
Risk management is one of the important aspects of trading about which many traders are completely unaware of. When putting a certain amount of money in your trading account, make sure not to invest all the money in a single trade. It is advisable to risk only 2% of your account size on any trade. This way, you won’t lose a big portion of your account, in case the trade goes against you.
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