Often people think that stock market is similar to a machine that makes money and can turn a simple man into a millionaire within a short period of time. But the theory is partly true. Many investors became millionaire and gained profit but beside them there are few also who failed to make profit. But there are reasons for making profit in stock market. Only thing is that you have to make some proper planning accompanied by good knowledge of stock market. The investors who have reached the top of the stock market are disciplined enough. So when you are opting various ways to make money, then opt those ways where you can make money without losing it.
IDENTIFY THE MARKET PHASE
It is very important for the investors about the present phase of the stock market, like just check out whether it is a trending phase or a trading phase and based on the present phase you can sell/buy shares. If the stock market is going through the phase of trading then one can sell or buy weakness or strength. But if you are unable to figure out the market policy, then this can surely lead towards failure or loss. So it’s better to acquire some knowledge about stock market before stepping in. You can also keep a watch on other investors and their strategies. Often it is advisable for new comers to keep a watch on the first phase of their stock market experience. Emotions can be affected even your one movement can change your whole life. Not necessary the change will be good for you. So it is very important to observe first then after acquiring experience you can take a chance to make some decision in the second half and another advantage is that real marketing starts in the latter phase of the market.
AVOID HURRYING UP TO BOOK PROFITS
Often investors have a tendency to book shares as fast as they can. But this can lead you towards disaster. As booking stocks earlier you can miss other profitable shares of the market, no matter how popular you are in the world of stock market. Still if you feel insecure then you can do it in several steps so that if needed you can opt for other profits. In this way you can take advantages of other moves. But the ideal policy is to buy a small portion of share so that if the market breaks down then you don’t have to suffer much. Don’t make the mistake of buying stocks basing on the previous records. It is not the same strategy always. In stock market nothing remains consistent, everything changes within a few seconds. All is dependent on the rise of the economy. Hence if the financial condition of the country is stable enough then there are chances of profit but if by any chance the situation is just opposite of it then only you can save yourself from having severe loss. Never ever depend on the previous records of the stock market. May be the share portion you bought was profitable previous year but it may not be the same this year. It may be much more profitable than the previous year or vice versa. But it r always good to have a knowledge about the past but it will be a disaster if you blindly follows the footsteps of the past.
DON’T BE SWAYED BY UNFAVORABLE EVENTS
It is not always true that any unfavorable event can lead you towards heavy loss. Profit and loss depends on the circumstances and nature of the current event that you are getting through. You have to carefully and wisely decide what you have to do in any unwanted event as it affects the stock market a lot. For an example, you can study the consequences of the Gujarat tragedy where an earthquake destroyed the whole state and everybody thought that were financially destroyed also and the stock market would be unstable. But the picture was something else. They overcame all the losses within a period of time. It reconstructed the whole economy system as well as the construction industry. Never ever mix one trade with another as each trade is different from another.
DIVERSIFY, HOWEVER DON’T OVERDO IT
Don’t make the mistake of putting all your money in stock market as you’re not sure what will be the result, it can be good for you or a major loss. Hence diversification is the only way where you can resist the loss by gaining profit from other sectors. This diversification of investing money is very important as it mitigates the risk. But it will not always be useful to you and can create problem for you. Still there are various chances to gain profit from investments.