A guide to become ultimate winner in Stock Market
Stock Markets are like a machine that produces money and its raw material is money. Stock market is all about money. You lose your money or you multiply your money. Everyone enters stock market with an aim to multiply his money many times.
Everyone wants to become Rakesh Jhunjhunwala or Warren Buffet but it is not so easy, Stock market is not a gambling house. Your luck does not pay here; your brain and your decisions multiply your money.
You have to play your own game here with your own rules. Let’s start with some basic rules to master the game.
Sharp your axe before attacking
Before you start your stock market journey make sure you have perfect weapons. In battle your sharp weapons matter a lot whether battle is physical or psychological.
Your weapons in stock market are good hardware, good software and attitude. I will advice to have a solid hardware (Computer or Laptop) that does not hang. I have lost many trades due to fault in my hardware. At the time of squaring up a transaction if system hangs you may lose a big profit.
Second, software that use should be latest, updated and original. If you are using windows Os, buy an original one.
Now coming to trading software, choose software which is user friendly and allows a single click option. If you are a trader, milliseconds matter in stock market. In a falling market every millisecond decides your profit/loss margin.
Some tips to choose good trading software:
- Software must not be web based, web based software are a big pain to handle. I was using Motilal Oswal’s web based software and lost good money due to connection lost for a second.
- Software must have a logout time option. If system is left unattained, it should logout automatically.
- Software should provide facilities to view all possible reports. Most of the software has different prices attached. If you are planning to make stock trading as your profession then invest some money in software so that you can view all reports required to make a decision.
- Software should be fast and easy to use.
Broker and Brokerage
Your broker is your window to market. You can trade in stock market only through your broker unless you are one of them.
Choosing a right broker will help you decide your script. A knowledgeable broker can guide you on different products available to trade in market. When to invest and how to invest?
In my case, I used to play only in equities but once I got connected with my new broker, Options & Future (derivatives) worked like a wonder for me.
You must keep in mind the purpose with what you are opening your Demat account. If you are a trader, chose a broker with lowest brokerage, keeping quality of broker in mind. If you are only an investor who buys and keep stocks for years, you can open a Demat account through your bank.
Emotions and reality in stock market
You cannot be emotionally attached to your favorite stock. You have to sell when your desired profit is realized. People fancy about their favorite stock and are never in a mood to sell against the trend.
You have to be a stone face to play your part as a successful trader. Emotions do not work in stock market. Your decision matters a lot, so selling or buying should be based on facts and not on your liking.
Sometime people do not sell their shares even after the share is making continuous losses. People prefer their ego over the reality.
Fewer stocks more focus
As a trader, how many stocks you can follow? It’s a tricky question right!!! Do not buy any stock based on the recommendation given on TV channels or by your broker.
Handpick few good stocks, follow them and play with them. It is always better to be confident in few stocks than blindly investing in too many stocks.
Cash and Papers
Even if your stocks are performing well, you need to realize profit from them. Once you have settled yourself as investor or trader, you need money to manage your family expenses.
Make a system of drawing money from your investments. Treat stock investment profession like any other profession and monthly draw amount equivalent to your salary.
Books to sharp your brain
Stock Market is a brain game. You need to keep your brain sharp to earn more and more money from stock markets.
Read lot of books, financial statement of companies in which you invest. Be updated with latest changes in rules, technology and government compliances.
Sometime a little change in tax laws can bring the market to ground. Impact of speech given by commerce minister, Economical numbers etc should be tracked to estimate changes in prices of shares you hold.
These are some of ideas which I follow and thought to share with you all. Please ask or suggest and make this a useful discussion.
A very good discussion started by stock guru. I am happy to see the kind of experts we have on Tikshare. Stock Market are the best place to get highest returns in quickest time but are equally risky too.
Your active brain and lack of emotions will decide your profits. Rakesh Jhunjhunwala is a bright example we have who started with Rs. 5000 and today his wealth is more then Rs. 5000 crore.
RJ is Warren Buffet of India, only difference that India is yet to see the kind of valuation American companies have.
Lets make this a good discussion, opinions of others are awaited.
The various factors you should consider are:
- Goodwill of the broking firm
- Software speed and ease of handling
- Trading or investing
- Customer service
- Money flow speed ie when your money will credited once you transfer the money to your account etc.
I have good experiance in options and futures. Lets open a new discussion on it. We can enlighten each other.