Stock markets are driven by greed and fear.
- Fear of losing money
Simple basic rules to tame the Fear Factor
* Always paper trade before putting in your own money.
A new trader should first learn trading through paper trade.
It is the better way to learn trading in stock market. Here there is no is involved and hence no fear of losing money, but one a beginner will experience the entire trading process.
* Only trade with money you can afford to lose
Trade only with money you can afford to lose.
Never trade with the money which is meant for your basic needs, such as food, rent, and other necessary expenses.
* Identify you risk threshold
Never exceed your individual fear threshold.
When the market goes against your trading, try to stay cool and have clear precise exit plans. Implement your trades with logic and common sense.
* Diversification
Never try to put all of your eggs in one basket.
Never invest a major amount of money in just one stock. Diversify your positions by investing in more than 5 stocks.
Investment Strategy
* Get Information Before You Invest, Not After
* Set a well defined objective for each individual investment.
* Be specific
* Be reasonable in expectations
* Consider Risk
* Be measurable
* Buy Low, Sell High. Buy High, Sell Higher
* Buy on the Rumor, Sell on the News
* Buy the Stock That Splits
* Never Buy a Stock Only Because It Has a Low Price
* Avoid Over trading
* Always paper trade before putting in your own money.
A new trader should first learn trading through paper trade.
It is the better way to learn trading in stock market. Here there is no is involved and hence no fear of losing money, but one a beginner will experience the entire trading process.
* Only trade with money you can afford to lose
Trade only with money you can afford to lose.
Never trade with the money which is meant for your basic needs, such as food, rent, and other necessary expenses.
* Identify you risk threshold
Never exceed your individual fear threshold.
When the market goes against your trading, try to stay cool and have clear precise exit plans. Implement your trades with logic and common sense.
* Diversification
Never try to put all of your eggs in one basket.
Never invest a major amount of money in just one stock. Diversify your positions by investing in more than 5 stocks.
Investment Strategy
* Get Information Before You Invest, Not After
* Set a well defined objective for each individual investment.
* Be specific
* Be reasonable in expectations
* Consider Risk
* Be measurable
* Buy Low, Sell High. Buy High, Sell Higher
* Buy on the Rumor, Sell on the News
* Buy the Stock That Splits
* Never Buy a Stock Only Because It Has a Low Price
* Avoid Over trading
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