I am sure every one of us wants to be rich. If you want to be rich with share trading, all you need to do is to follow these share trading tips.
A plan is very important with any type of investment. If you want success with your investment, you need to have a plan and stick with it. Take time to analyse the technical and fundamentals of the market and based on that, plan your next move whether to buy, sell or hold. Before the market opens each day, make sure to recheck the analysis you’ve made from the previous day. There could be something new occurred overnight.
Don’t trade impulsively as that will not help. This is actually the biggest weakness of most traders. They easily give in to impulse trading. Keep your plans and goals in mind always. Impulse trading is like gambling. It can cause you to lose your money by invoking your emotions of greed, fear or your inability to recognize that you made a bad move. Successful traders are aware of the possibilities of bad trades from time to time. But the good thing about them is that they don’t hold on stubbornly to a losing position. As much as possible, they try to keep their losses to the minimum.
Don’t waste your time with inactive shares. Avoid low volume trading shares. Instead, find shares that will let you gain at least 30% in just few weeks. This may mean keeping yourself away from shares you like personally and trade on those shares that looks ready to move.
Be willing to sell shares “short”. This is very important to make the most from share trading. Short selling means selling shares that the seller doesn’t own. To make it more specific, it is the selling of security that the seller does not own but is promised to be delivered. Actually, you can make more money faster when you sell short that when you go long.
Don’t sell a new high. There are good reasons why a market keeps making new highs. It is smarter to be “long” and bet on rising shares than to go “short” and be on falling shares. You cannot tell how high the market may go against you. Just wait for days to find definite indications of trend reversal. This may take few days to weeks.
If you think you cannot afford to lose your money, then you will also find it impossible to win. So trade only with funds you can afford to lose.
Another great tip is to cut your losses and let your profits grow. While this is the most important tip, this is also the hardest to follow. There are only few traders who have the discipline to take small losses. If you, too, can do this, then you’re in a very good chance of becoming a good trader. What happens most of the time is that when most traders make a trade, they believe that they’re correct. When the market moves against them, they hold on stubbornly. This is primarily because they find it difficult to admit that they are wrong. They refuse to take that loss and get out of the trade even when they see their loss getting larger. They are hoping that the market will turn around and once again prove that they’re correct or at least move back to reduce their losses. But most of the time, the market does not return to what they expected.
When you buy or sell “short”, you will know whether you are right or wrong before the week is over. When it shows a loss of 20%, you need to get out of the trade before the market closes that day. This move takes a lot of courage.
You can get more information about successful trading from CMC Markets.
About Carson Derrow
