Sharing experiences and knowledge is very important in any field, but learning from professionals is particularly important for traders because it may help them avoid unnecessary financial losses. Below, you will find tips from experienced investors for trading stocks. Following this advice will help you start investing in the stock market or currency trading. The tips are universal for all financial markets.
- Make a plan. Choose one or several trading instruments of your interest, and learn the strategies that already exist on the market. Define a trading style you find comfortable, and try to put experiences and tips of successful traders into practice on a demo account. Do not switch to real investments until you have established your own strategy, defined a goal, and decided on the amount of money you’re ready to invest in trading financial instruments. Professional traders do not start trading until they have realised their ultimate goal.
- Keep calm and stay focused. When working on stock, currency, and other financial markets, it’s very important to remain calm. Keep a stiff upper lip and stick to your trading plan. If your strategy doesn’t work, revise it later and do not attempt to do anything “under the gun”.
- Remember that everyone makes mistakes. No investor, not even the most experienced one, is immune to wrong decisions that have resulted into losses. This as a fact of life. The core principle of trading is that your profit must be higher than your possible losses.
- Make your decisions. You can follow stock trading tips from more experienced traders, but you should always remember that you are solely responsible for the decisions you make, and your decisions will affect your trading results. There are no decisions that are 100% ready and effective.
- Don’t be afraid of the market. Traders with a brief trading experience are in fear of uncertainties, especially in the currency market. However, these risks are a major piece of any investor’s work.
- Choose your own trading timeframe. Some traders prefer intraday trading, while others are more interested in long-term periods. The choice of a timeframe depends on your trading strategy and the instruments you have decided to invest in. When you begin trading, you can select the timeframe by following the tips of more experienced traders, just like everything else.
- Pick companies, not Stocks. This is one of the useful stock market tips. Constant monitoring of quotes may create the impression that Stocks exist on their own. However, below each ticker, there is a real company, the dynamics and activities of which you should be aware of before buying its shares and following its news.
- Make rules in advance. Make a list of the reasons that may stir you into buying or selling an asset. Check this list before performing each transaction. It may help you to prevent hasty decision-making.
- Place Stop orders. The way prices move, especially on the foreign exchange markets, is hardly predictable. Therefore, you should place Stop orders to decrease your potential losses.
- Increase your assets slowly. The Stocks market bears no haste. Be patient because earnings from investments may not come until months or even years later. Keep informed about the companies you find interesting, and slowly add new promising instruments to your portfolio.
- Take your time. Traders with brief trading experience often open several orders simultaneously, only to realise that they are not able to monitor all of them. Decide on the optimum number of trades you are capable of managing properly, and try not to exceed this limit.
- Update your knowledge Constantly increasing your knowledge is key in trading. Get new stock market tips from different resources, learn more about financial markets and trading instruments, try different assets for investments.
- Follow the news. News is one of the key sources of tips for stocks trading, and it may have a significant influence on financial markets. Keep up to date with everything related to the financial market. When important news and statistics are published, the market volatility may increase or decrease, and prices of trading instruments may change faster than usual. Therefore, if you plan to trade on news releases, you should take into account the instability in price movements and the nuances of execution of different order types during such periods.
- Monitor the market. Keep track of the prices of your chosen assets, how they change and follow the market situation. There is a good chance that some unexpected events may influence forecasts for the instruments you’re interested in, in which cases you will have to revise your trading strategy.
Before you start trading
- Make a trading plan. It is highly unlikely that your first investments will generate excessive profits. Build a sound and clear strategy and use it, especially during critical moments when emotions prevail.
- Stick to your strategy. Follow your trading plan, especially when you are feeling emotional. But don’t hesitate to revise it if your hypothesis turned out to be wrong. Everyone makes mistakes.
- Remain calm and stay focused. Don't loose your temper. This is one of the important stock trading tips for less-experienced traders. Try to control your emotions, and don’t make any hasty decisions.
- Study the market. Follow the news, study the market behaviour, and learn new assets. In addition, it might be useful to watch professional analysts and traders who are sharing their experiences, and get tips through their tutorials on stocks and currency trading.
- Benefit from opportunities offered by RoboMarkets. RoboMarkets clients have free access to analytics and educational materials. Moreover, you can choose a trading account and a platform that are more suitable for your goals. More detailed instructions on how to start trading at RoboMarkets, as well as useful advice can be found here.
Remember that the recipe for success on financial markets is an elaborated plan of actions and no wild decision-making. Selecting your trading account type wisely is also very important. Our list of trading account types will help you decide on the best account type for you.