Trading is profitable when you follow the best practices regularly. Otherwise, it can become a gambling or loss-driven process for you.
Professional trader always follows their pre-planned rules before taking any trades. Besides, they always learn from their mistakes and never greed for more.
Indeed, stock market trading is a risky business that always carries volatility. As a result, sudden rises and drops in price movement are normal.
Therefore, a trader should always prepare for any unwanted situation. Remember, continued learning and regular market updates are crucial practices that expert traders follow.
If you want to follow these practices, we recommend you join the best telegram channels for trading and collect all valuable information related to the shares.
However, what are the Practices you should follow while trading in the stock market?
Let us go in deep to learn about them.
9 Practices To Follow While Trading In Stock Market
Before starting the practices, keep a note. If you are a beginner, we suggest joining the best trading telegram channel to understand the ins and outs of the share market. After that, you can follow our recommendation to become a profitable trader.
1. Prepare and Follow Your Trading Plan
An expert trader always write down their entry, loss, money management and timing of trading. So it would help if you also plan a trade before investing.
Further, there are many things you should follow to prepare a schedule.
- You should back-test your strategy before applying it to stocks
- Fixed your trading time in days, weeks and month
- Note down your goal for returns based on capital
- Fix your risk to reward ratio from each trade
- Respect your entry and exit points
2. Trade like It’s a Business
You should always trade like it’s your business. You must forget about learning and commitments if it’s your hobby. So take this job seriously and perform like a professional trader.
There is a quote: “A profitable trader was a great loser once”. It means losses are part of trading, so you must prepare for that.
Therefore, consider trading as a business and always research new techniques, strategies, and ways to become profitable.
3. Take Advantage of Tools
In the current year of 2022, many advanced trading tools are available. And in future, there will be more advanced tools and apps available for stock traders and investors. You can take advantage of these digital apps and improve your trading style.
For example, tradingview is a platform where you can back-test your strategy, analyze price movement, apply many indicators etc.
Further, another tool is Stocksceener, which is a stock screening and fundamental tool for Indian investors.
These platforms undoubtedly help to improve your trading performance efficiently. For regular market updates, we suggest joining the best telegram channels for trading. Here you get stock news, trends, future predictions and many more.
4. Strictly Follow Your Risk Management
If you want to stay profitable in the stock market, follow risk management practices.
The golden rule for risk to reward ratio is 2:1, followed by many expert traders.
You can increase the profit ratio according to trades. All that means risk only which you can afford. For that, maintaining the golden risk to reward ratio is necessary.
5. Save Your Capital
Saving your capital should be your primary rule in the trading journey. Without money, you can’t afford to trade and make a profit.
Traders mainly wipe out capital due to greed or revenge trading. Capital below 50k should avoid taking more than one or two trades per day. Otherwise, you can pay more brokerage charges at the end of the month.
Avoid taking unnecessary risks, over trading, and more quantity to protect your capital. Along with this, you should also cut down big losses and try to make small profits continuously. We suggest joining the best telegram channels for trading so that you can learn all these things on a single platform.
6. Learn Everyday
Expert traders always focus on their learnings. They learn from their mistakes and never repeat the same process.
Remember, trading is a journey to compound your investment in a timely format. Deep research, technical analysis, fundamental analysis, and other skills are required to keep profitable in trading.
World politics, news, economics etc., can influence the stock market. So you must learn all aspects that help cut down losses and make profits. These aspects can be learnt by joining some reliable trading calls telegram group.
7. Always Follow Your Stop Loss
Stop loss is a predetermined amount where a trader exits from that holding.
Following your stop loss is essential to cut down big losses. In most cases, traders avoid this predetermined amount due to greed or fear. As a result, they make losses and cause a stressful mind.
Not adding a stop loss is a bad practice that most beginners follow. If you want to become a profitable trader, always make a stop loss and exit if the amount exceeds.
You can join trading tips telegram channels where they screenshot the proper stop loss amounts in specific stocks.
8. Know When To Leave Trading
Intermediate traders also face regular losses from trading. It is normal due to market volatility, news, economic crisis, pandemic and others.
Even if you back-test the strategy, sometimes it may not work. In this case, you have to stop trading and research more.
Alongside, you should also work on fear, stress, emotional changes, psychology and discipline management. All these changes help you determine your rules and keep trading more accurately.
9. Avoid Over Trading or Revenge Trading
This is another bad practice that most beginners and intermediate traders follow occasionally. Overtrading can cause significant losses or wipe out your capital.
This is a complete breakdown of your rules and taking unnecessary risks in the market.
Never take more than one or two trades if you have less than 1 lakh capital. Try to take small profits and avoid big losses from your journey.
So these are the practices you can follow to trade in the stock market.
Remember, following your rules is the best practice in trading. Further, the primary rule is – to cut down big losses and make small profits regularly.
You can take help from trading calls telegram groups. Consult with financial experts and prepare your own strategy, risk management plan, capital, and others.