5 points you should not miss if you are getting started with stocks trading
Are you getting started with stock trading? If yes, then this article is a must-read for you, as in this article we will explain the 5 core building blocks of stocks trading
Knowing these points will provide you with a strong foundation and roadmap for your growth and success in stocks trading.
The 5 Building blocks of a master trader
Note down these 5 points and put them on your checklist, as these things are must-haves for any trader.
1. Getting Started in Stock market
These are the points that will set up the stage for you. These are important as they drive the entire trading system. Note these points and get your basics cleared.
- Selecting a trading platform and brokers
- Reading charts
- Placing orders on mobile app
- Understanding different indices, sectors, company segments, and glossary
- Rules, regulations, and SEBI guidelines
This provides a basic foundation and helps you to get started with trading. Once you are all set, we can move on to the technicalities.
2. Technical knowledge
This is the heart and core of trading. Using charts and indicators for predicting the scrip’s movement is the main motive of technical analysis in trading. Technical Analysis helps to time proper Entry & Exit in Stock scrip. Rule-based trading is the concept all successful traders follow. The best analogy that can be given to stress the significance of Technical analysis in Stock trading is to jump in deep-waters without knowledge of swimming.
As a beginner, you should at least have basic knowledge of:
- Support and resistance
Try to get the best platform for reviewing charts & carrying out technical analysis: investing.com, tradingview are two free charting sites. Zerodha, Chartnexus, Upstox are platforms provided by brokers.
3. Building strategies
Trading is more than just plugging in some indicators and buying/selling stocks. You must have the right mindset and full-fledged plan in place. Without a proper strategy, you are sure to make losses in the Stock market even if you have some knowledge of Technical Analysis.
Any strategies you build or follow should be rule-based and should include:
- Stop-Loss and Trailing Stop loss
4. The game of emotions
Greed and Fear! This one is a game-changer. Because if you let the emotions control you, then your brain is going to stop working, and if your brain stops working during trading, then it’s a farewell from the markets.
It’s obvious that when your money is at stake, your heart is going to pump at max speed if things start going wrong. However, you have to adapt to this and learn to control the emotions… one of which is risk management and proper phased growth.
Following are the key aspects to overcome emotions of Greed and Fear
- Money Management
- Risk rewards ratios
- Position sizing
- Trade log sheets to understand profit and loss before execution of orders are must
5. Being a part of the trading community
Trading needs acquiring new skills and sharpening of skills. Joining a community or Forums, or being surrounded by like-minded people to share knowledge helps.
If you are aspiring to become a millionaire in a week or a month, then let me tell you that it’s not going to happen. Yes, over the long term, you surely will be able to reach that goal if you stay focused and work on the above 5 points mentioned.