They say that you can earn a lot of money in the stock market or in stock trading. You could say that it is some sort of a gamble considering that you can either win big or lose it all.
However, you invest your hard-earned cash to win, right? If your intention of entering the stock market is to get as much profit as possible, then read the rest of the article because I am going to talk about some great tips that beginners can use to win big in the share market.
1. Use Swift Trading to Your Advantage
You know about the stock market works, right? You go find a company you want to buy shares from and you contact your broker to make the transaction. That is just the basic idea of earning profits in the share market.
However, there is this thing called Share Trading which is kind of ambitious but with a promise of bigger gains.
The idea is that you buy and hold as many stocks as possible, look at the market using technical analysis, and whenever the market prices “swing” in your favor, you do the necessary trades so that you can capitalize on that.
Believe me, these sudden shifts in stock prices really happen at any time during the trading day. That is why you hold on to your stocks overnight or for several days until you find the situation where you can win big.
2. Never Lose More on Your Total Capital
When you’re going to conduct trades, make sure that you look at your current assets. You must never lose 2% or more of your capital per day.
Suppose that your current capital is at $10,000, you do not want to lose more than $200 a day.
That is why it is important that you look at the analysis charts closely so that you can make trades that will not allow you to lose a lot of your hard-earned cash.
3. Trade Early in the Trading Day
The major stock exchanges open at 9:30 and will end its session at 4 PM. The best time to trade is early in the morning, particularly the first hour (9:30-10:30 AM).
This is where the market shapes up and you will see how the share prices move by looking at your analysis charts at this very specific time frame.
Conduct trades in the first hour so that you can maximize your profits.
4. Have a Risk Management Plan
Every transaction that is done in the stock market will always involve a risk factor which means that you could potentially lose your capital on every trade.
Although you cannot control how the share prices move, you can control the risks involved. You can do this by coming up with a risk management plan.
In this plan, you basically just outline the trades that you will do in the future and calculate how much you’re possibly going to lose. After the calculations, ask yourself if you’re willing to push through with the trade or not. Doing it this way will allow you to cut your losses to a significant degree.
5. Leverage Trading
There is this thing called Leverage Trading where you buy stocks on margin or borrowed money. You can borrow some more money from your broker so that you can buy more shares to win big.
Do note that this is a risky maneuver, so you have to think long and hard if you’re willing to take this risk. However, if you strike and you gain more than you lose, then you’ve basically won big.