July 8th, 2019 → 4:23 pm @ WinTrader
Is it possible for you to start investing in the stock market with a small amount like 10000 with the few shares? The answer is, yes. There is nothing within the number of stocks even if you bought less number of shares of a company every day you will check its price moves because of your fear of loss. Day by day you may feel like you are owned that company. Actually, this is a good start to trade. All investors in their initial stage lose some money. This is the usual thing. This thing is not wicked. A trader can step up his carrier only by learning lessons from his mistakes. It is better to go with a discount broking. The low brokerage provided by them can make a great impact on your margin.
Before investing in share market you should keep in mind the following things
Don’t try to invest in low priced stocks
Investing in low priced stock will help only to learn the trading screen. A group of traders are there one who invests in low priced shares with the hope of making a serious profit. They think that investing in low priced stock is a great idea. Yes, Of course with 10000 you can buy a lot of shares and if you have owned 100 shares of Rs.100 each 10 point peaks of one share you will get Rs.1000. This is the positive side. But this will not happen all the time. They can also boom in some moments and may never top again.
Slow and steady wins the race
Putting all your investment in one basket is not that much good. That means, it is not good to invest 100% in share market when you start. Give 50% first, work on it once you are familiar with the track you can invest more.
Keep cash on the sidelines
Investing is a long-term business. So in this long-term scenario for facing emergencies and opportunities you must always have cash on the side-lines. This side-line cash will not give any returns but even professional traders also will not take the risk of investing without cash reserve.
Don’t borrow money to invest
I know every investor might be encouraged by their broker to take a margin. Most of them don’t understand the truth that it is a big trap. Squeezing maximum brokerage from your account this is the intention of every broker. At any cost don’t fall to this trap.
Don’t pick Robo-advisors
Almost all investment brokers offer robo-advisors. Their job is to handle your account. They will invest your money for you based on your specific goals. Try maximum to do trade by yourself. This robo-advisor may reduce your stress but it is risky always. They may offer low-cost investment management. But never fall to this.
Things to be avoided during stock trading
The main difference between a novice trader and a professional trader is this. A professional trader always has his own trading plan. But a beginner doesn’t have any trading plan. He will trade randomly and will make huge losses. Even one has a trading plan they will quit the same if the plan seems to fail one or two times in trading days. They don’t know the fact that all plans will not work 100% in all trading days. There will be negative and positive market. What’s our aim is the month end profit only.
Trade without stop loss means to drive without a helmet. Here a trader not giving any security to his investment. The result is their blood pressure will rise and their capital will fall. Only a trader without a trading plan will do this mischievous thing. Because they are expecting that after the small fall their trade will succeed later. But they do not understand they have mislaid their opportunity. If a trade is not working take a small loss quickly. And retake an opposite position to achieve the goal.
You are living in a big society. That society includes you, your uncle, your family, neighbours, colleagues etc. In fact, the thing what might have worked for your uncle, neighbour or a colleague at a particular point of time may not work necessarily for you. All novice traders should keep in mind this fact before starting investing in stocks. So instead of getting influenced by your peers, make your own rational and logical decisions to invest.
Unemployment is a serious issue facing the younger generation. They wish to make money quickly with less effort. When they come to know about the equity trading they believe that it is the right place. And they quickly jump into it. They dream to get rich overnight. But the reality is different because they are not aware of the trap of the volatile market. They may occasionally get short-term profits, but when the market turns volatile within a short term they will lose a large sum. Then only they realise that equity is a long-term avenue, and not short-term.
Optimistic is always spontaneous decision makers, they tend to take more risk than they can digest. Understand the risk in the volatile and non-volatile market and play with your means. Never ever try to take a large risk and don’t be conservative too.
A young person while making investment decision might end up considering only one aspect, say past returns. They do not understand that all trading involves high risk; past performance is not necessarily indicative of future results. When you choose a company check its balance sheet, check its operations also check the behaviour of their product.
A novice investor always needs help from an experienced person in the initial stage of investing. This is because of the lack of knowledge or time to analyse a particular asset class. Experienced person means one who can work out an asset allocation plan. That means a financial planner.
If anyone want to know more about investing in the stock market you can go through the following links