How to Trade the Stock Market – Tips to Making Money Consistently!

In our thriving economic environment, there are increasingly more people seeking to ultilize their money from their own pocket to create a side income to supplement their 9-5 day job salaries.

The most common place is in the stock market, where people want to take advantage to uncover the next big opportunity. That’s what we all hope to achieve and hopefully make extra cash that will help us improve our daily lifestyle or fund a nice vacation.

There are various methods you can approach the stock market in a profitable way and I’ll be sharing some tips with you about how to trade the stock market. These tips are proven to help you understand and achieve your trading goals so read them carefully!

If you are not a full time trader and have no deep understanding and knowledge of the fundamentals and technical aspects, you will require ways to strategically determine what entry points would be a good investment for your investments.

This is often easier said than done because accurately predicting the movement of a stock can be tricky and tough. I’ve been trading for some time now and I use many indicators to help me read the markets so to make informed decisions.

How to identify entry points and what to trade?

There is no hard and fast rule, but I think that having a trading plan and mental toughness are two key factors that separate a successful trader from the unsuccessful one. In order to learn how to trade effectively, you must focus on your mental side very strongly.

Tip#1: Read & Research In order to understand the stock market, some work and effort is needed. You have to study how the stock market works and the trends in stocks. Research on the company you have an interest in and learn from successful traders so you can prepare yourself for the investments you will make.

Read widely on trading, economics and current financial situations around the world. This will greatly help if you want to know how to prepare yourself to play in the stock market.

Tip#2: Manage your financials well Learning to manage your financials is one way to get you prepared before taking the plunge. You don’t have to hold a degree in accountancy but you need to have an understanding of the basic principles of money management.

Make sure you have the right mentality and attitude and trade what you feel is at your comfortable level.

Tip#3: Your investments should ideally be long term The stock market is not a casino, so think long term. While there may be many who make a living out of speculation, it can be a part of your portfolio too.

But always have a portfolio of stocks that you hold on to long term as well because some are likely to appreciate in value.

Tip#4: Don’t’ panic sell Volatility are a common sight in the market these days, just like pot-holes along the road. If you follow the herd mentality and discard your stocks on panic selling, you could end up losing out if the market ends up correcting itself over the coming days or weeks.

Bear in mind on tip#4, your investments should ideally be long term.

Tip#5: Diversify your portfolio. Put your eggs in different baskets. There are risks with stocks investing. As such, you should not dump all your eggs in one basket or invest only in one stock. A well diversified portfolio is one that spreads your risk.

For example, if one stock or sector is in the red, you may find that other stocks you have in other sectors are appreciating in value.

My Comments

Firstly, you should have a good entry and exit strategy and set limits for yourself on how much you can afford to lose and how much gain is a comfortable point to take profits. This can shield you from the risks of losing whatever you’ve gained in your investments.

Secondly, do not let emotions get the better of your trading strategy. This can be very difficult because your money is at stake. Unless you are a seasoned trader, the best way to segregate these emotions is to make use of trading tools and services with the ability to read the markets and provide advise on what stocks to buy or sell. Where It happens to be the two vital elements in trading.

Thirdly, nothing beats being an expert in the stock market. But while you become one, you can definitely take advantage and make money trading stocks with the help of reliable software and services designed to point you in the right direction.

Lastly, hope you enjoyed this article, there are more tips waiting for you on how to trade the stock market!