How hard it is earn money in stock market?
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Answer:
Over the past two decades, many people have made a lot of money through factories, stocks and the Internet.
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It is hard. There is no easy way of making money, esp in the stock market.
Here are the steps you need to make in order to make money in trading:
Research about the market
Before investing your money on random stocks that you aren’t even sure if they’ll appreciate or depreciate their value, you should first research on the current market trends. There are a lot of websites that regularly update investors on . You can use these to see which stocks are likely to increase their value. Once you have a solid choice of stock, then you can start investing in it.
Choose an online broker site
Now that you have a stock in mind, the next step is to find an online broker site that offers trading on the stocks you want. Choosing a trading site requires a lot of research. Make sure to read reviews of the site you want before you create an account with them. The trading site should always be trustworthy and have high integrity based on their past transactions to make sure your money will be well taken care of.
Practice on a demo account
Once you have picked a reliable online broker site, you can now create an account with them. Most of the time, these broker sites offer the creation of a which you can use to practice your trading skills and formulate trading strategies. The good thing about a demo account is you can experience how trading really works with virtual money so gaining or losing money is not a problem as it is simply a simulation of a real trading process.
Create your trading account
Now that you have practiced your skills and developed your trading strategies, you can proceed to creating a where you can invest real money. Trading sites usually offer several different types of accounts. Make sure to choose one that fits your trading plan or lifestyle. For example, if you are a beginner, you can start with the minimum account to try out your trading strategies first.
Choose and buy reliable stocks
Buying your first stocks is also a crucial part in trading as this would test your analytical skills. You should buy stocks from dominating companies that you positively think will increase value. Make sure to read about the company’s previous stock records to make sure you only invest in a profitable company. In case the stocks you have brought depreciate, do not be afraid because the market usually fluctuates a lot and there is still a possibility that your stocks will regain its value.
Monitor the market daily
Now that you have your own stocks, you should always monitor the market and make sure they are always in a profitable favor. You should also be updated on the stocks that enter the trend so you can invest in these and gain more profits. Also, set a stop loss to make sure you have full control of your assets. This is important so that you can make sure not to lose more than what you can afford to.
Consider reinvesting your profits
Trading doesn’t end in buying and selling of stocks once. Of course you can always withdraw the money you have accumulated in your account. But also consider reinvesting them into other stocks so you can have a higher chance of greater profit. This is a way to make a stable living through online trading. Just make sure that even though you are handling several different stocks at the same time, you can monitor each stock to ensure they are still creating bigger profits.
Now, these are the mistakes you should avoid doing if you want to secure those profits:
Lack of preparation
This is the most common mistake that beginner traders do. They get too carried away by news of people becoming successful in trading that they think it can be easy to do. They end up entering in a trading career without enough research and strategies to follow on hand. They shouldn’t underestimate the time, effort, and dedication that professionals spend before becoming successful in trading. Simple research and reading is not enough. Consider getting hands on training or working on demo accounts to get adequate training before entering a real life trade.
Trading on emotion
It is understandable that traders become emotional when making trades since it involves the use of their hard earned money. The outcome of any trade depends on how the trader handles the exchange so following a trading plan is very important. However, there are a lot of cases wherein traders does not stick to their plan, especially if they see their assets losing value. They may probably be able to avoid greater losses, but thinking about the long term effect of this practice, they are more likely to trade based on their instinct instead of having a rational strategy, thus making it more like gambling instead of trading.
Blind Trading
New traders have a tendency to trade based on the saying “believe what you see”.