Every trader now and then runs behind the share market tip but does not try to get a deeper understanding of the stock movement and volatility. This leads to losses. Instead of those fake tip, it is good to follow a few strategies and online trading tips that ultimately opens a gateway to profit and success in the stock market.
In this article, we have enlisted 9 best tips that an online trader can follow and maximize profit.
Best Online Trading Tips in India
What is the biggest challenge in front of every beginner trader or investor is to pick the right stock, make an entry at the right time, and ultimately figure out the exit price if the market goes against their move.
This is where online trading tips become a friend, where a trader is able to enter the market by understanding all the conditions and increasing the chances of earning profit.
So, without any further delay, let’s have a quick look at those golden tips that increases the benefits of online trading.
1. Follow a Trend
The trend is a friend of every trader and it is therefore important to consider the trend before taking any position.
For example, if the market is bullish then go long i.e. buy the stock at the right price. On the other hand, if the market is falling then it creates an opportunity for traders to short their position.
If you are an options trader then a bullish market creates the chance for you to buy Call Option or Sell a Put Option and vice versa.
In simple terms, every kind of trend in the market opens a gateway to profit in the market. It all depends upon the position you take to reap the benefit of it.
2. Stock Market Analysis
Most of the time it is the fake news or rumors in the market that results in the development of a particular trend. So along with the trend analysis, it is important to analyze other aspects of the market as well.
It prevents you to take the wrong position and helps you in staying away from any losses. Now there are different online trading types, to do the right analysis it is important to choose the one you want to focus on.
For example, if you enter the market with the objective of doing positional trading or delivery trading then it becomes important to consider the qualitative and quantitative factors of the company.
For this do a detailed fundamental analysis of the stock. In simple terms, understanding the business of the company and going through the company’s history, alliances, and knowing a company’s future prospects are necessary while trading.
3. Read Stock Market Charts
As discussed above, a trader must focus on the trend. Now to gain the right understanding of the trend it is important to read stock market charts.
There are different types of charts that can be used to analyze the market in different ways. For example, one must check for the line chart to determine the trend.
On the other hand, for stock movement analysis at a particular time frame, there are advanced candlestick charts.
Here to decide the target price, one can find the right support and resistance level and make the right decision accordingly. Here the resistance level is used to set the target price and on the other hand, the support level helps you in determining the stop loss value.
Also, stock market charts come along with different technical indicators that further help the trader to predict the trend, momentum, and volatility of the stock.
Here it should be noted, that a trader should not use more than 3 indicators at one time as it can create confusion.
4. Choose the Right Stock
The right stock is the one that is traded has good volume and has high liquidity and average volatility. Generally, a beginner trader must avoid the situation of trading stocks with high volatility because it involves a lot of risks.
Now to get its understanding, most traders look for low-cost shares like penny stocks. Now, these stocks have minimum liquidity which makes it difficult for the trader to square off their position. This often becomes the reason for losses for traders.
5. Paper Trading
For beginners or for someone who had lost money in the stock market, paper trading is the only ray of hope to gain your confidence.
Things might be blurred for a beginner, so paper-trading for a couple of months will not only help you correct your mistakes, but it will also help you to have a deeper understanding of the market.
Here you can use different trading platforms where you are provided with virtual money with which you can trade in the real market and gain a better understanding before actually making the real entry.
6. Decide the Right Time to Buy and Sell Stocks
Timing is one of the components which you must focus on. Within the first hour of market opening or last hour during market closing trade shouldn’t be done by beginners.
Markets tend to be very volatile in those hours. If you are an expert trader, you can make use of the volatility by gaining quick profits but beginners avoid those rush hours. Let the market become stable and then make your entry.
Also, after opening a position, avoid any kind of greediness, and to avoid any risk square off your position at the target price you have set even if the market increases the chance of more profit.
Instead of focusing on the same stock, you can look for other multiple opportunities of earning profit. If you are a beginner than to make the right decision consider taking online trading courses.
7. Follow Global Indices
Now, analyzing the Nifty and Sensex to understand the market is important but at the same time, global indices also have some sort of impact on the Indian stock market.
It is therefore recommended to get an idea of how the global market is performing before getting into online trading.
Some of the international indices to be followed are NASDAQ, S&P500, DOW JONES, CAC40, EURO, etc.
8. Avoid Aggressive Trading
As a beginner trader, it is more important to understand the market first. It is therefore suggested to smart small and make few trades in the beginning.
Since the market is unpredictable, therefore, one should enter the market with the amount that he or she afford to lose in the trade.
9. Diversify Your Portfolio
A famous saying states that one should not carry all the eggs in one basket, similarly when trading in the stock market, it is important to divide your money into different options and diversify your portfolio to minimize losses and risks.
For diversification in stock market investment, choose stocks from different sectors and use the respective fund on the basis of different parameters as discussed above.
Here apart from trading in stocks one can invest in different financial instruments like ETF, Bonds, and Mutual Funds.
So, here are the golden online trading tips that help a beginner investor in choosing the right trade opportunity and using the right strategy.
Above all, to make the profitable beginning one should focus on learning and acquiring an understanding of the stock market.
You can gain knowledge about the technicalities and complexities of the stock market by registering yourself for the stock market courses.
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