The most important thing you must keep in mind while dealing in stocks is discipline!  Normally every one gets a doubt, why this writer telling a known fact, even I am always in discipline.  But again you think for some time.  Have all your decisions turned profitable in the context of your investment in stock market?  Have you not ever commit any mistake in the investment decision in stocks? If your answer to these two questions is yes, then you need not read this one.

Generally every trader thinks to keep himself in control while he is in the dealing room, but everytime he repents while he looses his money.  So discipline is the thing that every person has to remember and these are few tips to trade with discipline for your success of earning money through stocks:

1. Never believe any rumour regarding a stock. Do not buy on oral information by your friend, colleague or any one. Today, there is plenty of information is available through net, tv or newpapers.  The coverage on the stock markets is also increased a lot. So you need not depend on others for information about a stock.  There are lot websites which provide you good amount of data on stocks and stock markets.  You can log on to them and access readymade information on these sites.  Moneycontrol.com and myiris.com are a few among them. If you go to a good stock broker also, you can get reliable advice but do some work before you invest in any stocks.

2. Do not play with borrowed money. Never go for trading with the borrowed money. As the stock market, always fetches you profits, and the erosion of capital is not ruled out, one should not invest with the borrowed money. Invest the money which you do not require or extra money but keep always your savings should be in tact, so that you and your family should not suffer due to your investment decisions.

3. Trade with a few stocks. Never trade with a lot of stocks.  Trading with a few stocks has many advantages like keeping the track regularly and liquidating the stocks quickly. Also if you trade with a lot of stocks, your money would be locked in for a long time, which is not suggestible in trading.

4. Never invest at one time. Do not keep all your money at once. Wait for the dips of individual stocks and markets, where you can get an entry point. Every dip, generally a good entry point and you need to keep some money for this. So investing entire money at once is not at all advised in the stock trading.

5. Mind your exposure. In the rule 2, itself I mentioned not to trade with borrowed money. At some brokerages, you wil have facility of providing with exposure limits.  Generally it is in multiples of your investment.  Though it looks quite attractive, it is also very dangerous. So if at all, you decided to use the exposure limit facility use it for one day or two days. Do not use it for more than that, as when the market falls, you shall have to pay off the limits and generally at that panic moment you need to book losses in your traded stocks.

6. Keep strict stop-loss. Stop-loss is the best tecnique to avoid losses or limiting losses.  Always place a stop-loss to your trade, so that you would not lose your money so easily.  In fact, so many traders get bankrupted because of not keeping stoploss while they trade and may be this is the reason, in stock markets majority of traders are losers!

Let us know some more about stock markets, next time! Have a nice trading day!

• Written by rajeshyalla.
• In category Stock Markets.
• 15 years ago.

Hot Hits: 3090

Like it on Facebook, Tweet it or share this article on other bookmarking websites.