How Much Money Can You Make in Trading Stocks?

Points to Note While Trading

• Stop-Loss

Stop-Loss is a trading process that allows you to cut your losses while Trading in the Stock Market. When you put a stop loss criterion at a certain price of your stock, it is automatically sold when the price falls below the stop-loss price level.

For example, if you bought shares of a company X at Rs 300 per share and you put a stop-loss order at Rs 260. So, if the price falls to Rs 260, your shares will be sold automatically, thereby reducing your loss to just Rs 40 per share. 

• Through Background Research

Intraday trading requires a lot of homework. Making quick bucks, which intraday trading essentially offers, has to be backed by thorough research of the company.

Traders have to be skilled in charts, oscillators, trading metrics, ratios, monitoring volume, and many other indicators that require training. Stock market returns are volatile, more so when you are buying and selling on the same day. Hence, proper research and upgrading your skills are essential.

• Regularly Monitor Your Investments

One of the most important qualities to be successful in the Stock Market is to monitor your investments or portfolio on a regular basis.

Monitoring your portfolio on a regular basis helps you to sell your stocks immediately if you think the prices are likely to correct in the future. This is required even more in intraday trading. This is because your daily activity can decide your position (profit/loss) in the market and financial condition.

You can also earn a huge number of profits from stock trading or by selling your stocks at the time when they are at their peak price, but you need to go back and monitor your portfolio on a real-time basis to know when is the right time to do the same.

• Requires Patience

If you want to make money from high-return stocks, then the very basic requirement is patience. Any decisions taken on a whim can make you lose a lot, especially when traders deal with large sums of money.

• Avoid Herd Mentality

One of the most gruesome mistakes one can commit in the stock market is to buy or sell just because everyone else is doing the same. As an investor/trader, you have to understand that your financial goals are not the same as another person. Day

Conclusion

In conclusion, if you buy or sell a stock, it should be based on your research. In other words, you may buy or sell a stock because the timing is right, the fundamentals of the company have changed, or there are certain regulatory changes that may impact your holding.

Above all, you should buy or sell stocks only if it is within your financial capacity.

Happy Investing!

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.