Trading smartly on the stock market in order to profit from it consistently is no simple feat. There are just too many unpredictable ups and downs. Yet, with our time-tested Indian stock market tips, you can be better prepared to trade effectively on the Indian bourses.
1. Research Before Investing
It is quintessential that you research thoroughly before investing. In fact, if you plan to commence trading in stocks in the coming year, your research should start NOW.
In this regard, it is a misconception that you must ‘pay to play’. There are ample FREE resources out there that will bring you up to speed on all the basics of trading effectively.
Beyond that, there is a multitude of other financial knowledge resources, both online and offline, that prove effective for keeping you abreast of all that is happening in the financial world. Money control, for instance, is one such powerful resource.
2. Build Up Sector-Wise Expertise
Effective stock market trading mandates sectoral expertise. For instance, once you have built up expertise in the pharmaceutical sector, you can trade effectively with pharma stocks. Such expertise takes time to build. Therefore, invest adequate resources towards building such expertise.
This goes beyond simply reading about such sectors. In fact, there are many self-proclaimed “sectoral experts” out there, whose knowledge is largely theoretical; don’t fall into that trap.
Instead, you must look to trading in sectors of your choice and gain hands-on experience. Only when you dive in deep and get your hands dirty will you really be able to build the expertise we are referring to.
3. Start Small – One of the Most Fundamental Stock Market Tips!
One of the most fundamental Indian stock market tips would be to start small; don’t jump into investing too much in too many places. Instead, start small and see how your trade performs. Remember that just as there are big gains to be made in a short period of time, losses can also be just as big.
So start small, dabble little by little, and see how things go. Based on how well you are able to trade with these smaller investments, you can then look to expand your overall horizon. When it comes to the stock market, take it one step at a time.
4. Diversify your Portfolio
At an advanced stage, it is really important that you diversify your portfolio as much as you can. Stock markets are a really unpredictable platform where things can go in completely different directions, especially when least expected.
For instance, can you even imagine that Donald Trump’s tweets have cost investors over $500 billion? Who would have thought things so uncontrollable and random could impact investments so greatly?
Over investing in one particular stock or sector is never a good strategy; things can go awry at any time. Instead, diversify your portfolio to the maximum extent possible. That way, a down here or a crash there will be more than made up by many gains elsewhere!!
5. Trustworthy Intermediaries
Irrespective of whether you choose to trade directly or through a stockbroker, those intermediaries must be reliable and trustworthy. Even while trading directly, there is every chance there would be an intermediary such as an online platform involved.
How reliable are they? How long have they been around? You must look at all such factors before zeroing in on a platform of your choice.
6. Don’t Be Greedy!
In stock parlance, we can extend that belief to “Don’t Be Greedy”!
To give you an example, don’t give in to the temptation of focusing excessively on penny stocks, just because they are cheap! Contrary to your hopes, such stocks may never grow to higher levels. Stocks are investments that very rarely offer immediate payouts, so make sure you are ready to commit for the long run.
While there are countless lessons to be learned while navigating through the extremely precarious trajectory of stock markets, the stock market tips shared above should prove really useful for you. These tips are especially useful when you are first starting out.
If you want to find an alternative way to invest your extra money, we have an idea!