You have to understand the process of making an investment plan stepwise before beginning your career in stock market trading.
Steps of Becoming a Stock Trader
Start building chart
The methods to building a chart is based on identifying trends. This is further drilled down in analysing data of company market cap, growth, new launches and overall sectoral expansion. You have to at last include past dividends paid by the company to stock traders. The identification of rise and drop must be highlighted with vertical and horizontal lines. The intersection of both these lines would help you in knowing the data point of that time. This data point is reflective of price rise or price drop. You have to then cross verify with market conditions of that period. The verification is done to know the reason why the stock prices drastically fluctuated. Why the sudden rise led to massive purchases of the shares.
Recognise Bullish and Bearish Patterns
Before buying or selling stocks, you must know what makes the transitions possible in the stock market. For this, you must know that there are majorly two types of investors; financial investors and strategic investors. Both these investors ride the market on their methods of investing in the market. Bullish and bearish patterns are represented by bull and bear traders. Bull traders push the market for higher valuation, they daringly buy stocks at optimal prices. While bear traders slow down the market. Sometimes, it becomes important to distinguish the transitions occurring in the market due bull or bear investors. This skill further helps you in differentiating one trend from another. You are able to identify the stock that is range bound and stock that is trend sensitive. You can use tools available in your trading apps to draw charts and configure the data according to date and price range.
Customised Strategy Development for Trading
Developing different strategies for making right buying and selling decisions is critical to earn profits in stock trading. Understanding timing of the share market is crucial; when to buy, when to hold and when to sell securities. It is possible after doing basic f fundamental and technical analysis for stocks. You start with small range of data because starting the analysis with longer data range would be too complex and cluttered – reading the data would not be possible for you. Later after months of practice you can make analysis for longer date range. This type of long term analysis help you in investing for bonds, corporation projects and government securities.
Securing Money is Good Habit
First of all, when you start investing in market be ready and mentally prepared to face losses. Each loss brings with it a big lesson of learning for you. This forces you to maintain discipline and skip making foolish emotive decisions.
You must have spare money to deal next day if you are looking to invest in intraday trading. You must work for alternative sources of income. No one can sustain in the market, very few are able to do it, by investing money from their savings account. It is highly recommended to invest money from part time or other flow of income. The reason being, you are then able to make investments in volatile stocks which is bit risky but give you high returns. Though you should invest in such securities when you gain some years of experience in the market.
Learn share trading, it covers information about stock trading with details to read market movements on your own. This will help you in knowing important details about share market.