Today people are bombed with profitable offers from various trading companies, who are offering 500 Rs per stock trade. Since the terms and condition are much better earlier, It looks very tempting to start trading the Internet trading was possible. Well, that was good news.
The bad news is the companies out there, are just selling you the tools and service, earning profit out of it is up to you. If you profit or lose your cash, the company will get its fee for each trade anyway. Since you have already decided to step into the stock market, it’s damn sure that you are most likely planning to get a good return on your investment. The return should be better than what you are investing your money into mutual funds (less risky than single stocks) where profits are guaranteed.
Well, how can you get such returns? Buy low, sell high! Follow this you will be a successful stock trader. How to buy? Well, let’s assume you got lucky and the stock after you purchased it is going up, just as you planned. After the stock is up 20%, Sell it, or wait until it is up 50%. Do you listen to investor news and sell, buy, or hold the stock? If you hold the stock, are you sure it will go up? The truth is some people do know the answers to those questions. Most of the time, they follow specific company stock results and based on it they take the call to buy, sell, and hold, where they make a profit.
If you’re new in this game and not planning to spend much time on research, chances are you will lose. Remember that you will be competing with professional traders, big players and insiders who profit mostly, your chances are very slim to earn the profit. Some may argue: “I had that stock, but if I did not sell it at that time for 20%, I would be earning 300% profit out of it. If I did not, I’d made a lot of money!” That is right you can make a lot of money, but it is not that easy as it looks. Let’s assume that you were holding a particular stock at the time it was up 20%. What makes you think you would wait until it is up 300%? You may have sold it when it was up only 25%. Or it may go down say e than 20 %. The lesson is simple you, being a fresher can’t predict the market and the way stocks move.
The bottom line is that it is easy to look at the past and disappoint. However it is challenging to do the right thing unless you know the market trends, understand related industries and the stock company most likely you will not be able to make profitable trades. Don’t repent for the mistakes what you did, learn what you missed and rectify it!
Even professional traders make mistakes and lose money. If you are not one of them or not planning to become one, your best bet would be invested in CDs, mutual funds or your own business.