Now a day’s everyone wants to make it big in the stock market. Trading can be a rewarding task when you get the hang of it. That is why I have put together this list of stock market tips.
1. Cut your losses short. It is very important to cut your losses short in the stock market. Capitol preservation is a very important key to remember. Think about it if you lost all your capitol when you were right you will not have any capitol to make money with when you are right.
2. Don’t trade against the industry group. It is said that 50% of what a stock does is based on its industry group. If the steel industry group is going up then stocks in that group are likely to go up to. There will be stocks in that group that go down, but it is best to stay away from these.
3. Develop your own system. This is perhaps the most important part of investing. You must develop your own system of strict rules that tell you when to buy and when to sell. These rules should be simple enough for you to be able to follow them effortlessly.
4. Don’t trade against the trend. Bottom fishing and top picking are the most dangerous ways to trade. The risk that you would face with picking tops and bottoms far outweigh the rewards. It is better to buy a stock that is heading up then to short it.
5. Keep your emotions in check. If you cannot control your emotions when trading you will lose money. Some traders get in and out of trades because they are scared, as opposed to when there system tells them too. This will only hurt them.
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