Wednesday, June 01, 2011


Some tips for better and safer investing

• If the stock falls and you were expecting it to rise, drop it. Don't hold onto a stock just in terms of trying to average out something if you don't have confidence.
• Never trade with money you can't afford to lose. Don't take loans for the purpose of investing in the stock market.
• Always have a plan of action for your trading. People who have a plan and follow it (and modify the plan from time to time depending on the market situation) make more money from the stock market.
• Always follow your plan of action.
• Don't hold on to losing stock. It's termed as catching a falling knife, which can cause more damage to your investment.
• Even if your stock continues to rise, you should still sell in accordance with your plan.
• Don't hold on to winning stock longer than you planned; things can all too easily turn against you. Greed is something that needs to be controlled.
• Set a limit for how much you can afford to lose in a day. Use a stop loss judiciously.
• If you lose your limit, get up and walk away; stop trading. If you continue, you could even lose your shirt.
• Accept that you will lose money sometimes and be prepared.

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