Be alert while investing in shares market

Here are some important tips which should be kept in mind while investing in share market.

A person must take care of the following points while investing in share market.
1. Don't invest in only one share at a time :
Don't invest the whole investment in a single company or in same type of shares. Invest in many types of shares and in many companies so that in case of loss from one share or company, that loss can be reimbursed by gain from another share/ company. Always save some money with you in hand so that you can purchase the profitable shares at time of need. Please note that the capital invested by you is termed as risk capital.

2. Step in with trading plans :
Always consider the ups and downs in shares. Suppose that there is an up in share 'A' and share 'B' is fallen down. In such a condition, a clever investor will invest not only in share 'A' rather he will also invest in share 'B' but with full trade planning.

3. Don't opt excessive trading :
Whatever is the profit in a particular share, keep your risk capital in that particular share equivalent to the risk capital in the beginning in that share. A phase of correction comes after fluctuation in share prices, i.e. if the price of that any share has reached to its maximum level, then people will sell such shares so as to gain profits from them. This will result in downfall of prices. In such a situation, you cam also suffer losses. Similarly, when the prices of any share reaches its minimum level, then correction phase starts again resulting in rise in price of that share.

4. Squeeze out your profits :
There are very few ways to recover from the losses in share market. Sometimes, over confidence makes you drown. Therefore, it is advisable to take out your profits from time to time so that you can invest that money at right place in times of need.

5. First in first out :
Its very necessary to recognize the ability of shares to earn profits from them. Its advisable to do long term investment in established companies while you should take out your profits from time to time inc case of new and small scale companies.

6. Be a horse of long race :
Invest for minimum 5-10 years because only then you can get optimum return (maximum benefit) from any share. But don't forget to keep an eye on the market movements simultaneously.

7. Do less estimates and more argues:
Well, share market is know as 'Mathematics of estimates' and those are quiet effective who believe in profits, but don't adopt a practice to follow crowd. Use your own senses. The decision to invest or withdraw money should be taken after considering the volume and balance sheet of company. Don't get nervous with the up slope or downfall in the share market. This is normal in share market. If there is no change in the infrastructure or basics of the company of whose shares you are holding, then keep on to invest in that company. Don't sell the shares uselessly by getting nervous from sudden sharp bounce or sharp fall in mutual funds.

8. Clarify your view :
How much update you are for investments and you are comfortable with what kind of investments? You want to make money in intra-day trading or want to prefer huge investment for long term? Prepare your trading plan considering these all facts. If your view is clear, then you are sure to get gains.

9. Do not salute the rising sun only :
The price of share does not increase just because it has very good presentation. This may happen also because stockers are increasing their prices by future purchases. They have their own business interest behind this. Thus it matter a lot that what is the presentation of any share or mutual fund during downfall.

10. Know Stop loss :
Market experts decide a target price of shares of a particular company and it is suggested to buy or sell shares beyond that target price. Stop loss means suggestion to sell the shares on sharp bounce or fall in their prices. Thus their will be no misunderstanding towards any share.

Article by Nidhi
Nidhi is a freelance content writer with 7+ years experience. She has great passion to write on valuable topics so as to provide accurate information to her readers. She is also keen to provide employment to all Indians and so posts various job openings too in this website.

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Author: Pravat Kumar Das04 Sep 2014 Member Level: Gold   Points : 5

The first of all the person who want to start career or business in share market should specify him self whether for long run or short run?

Always remember knowledge is the power to get success in share trading.

To get long term and regular profit you need many things together
Knowledge+ Practice+ experience+ patience+ money management + Luck.

So start learning and then think about to get success in share market.

Never start trading blindly believing with recommendation of others.

Remember some Golden rules to make profit from share trading.

1- Always trade with your own money.
2- Trade with small quantity ( rest money can be used for averaging if necessary).
3- Always do part profit booking.
4- Use proper stop loss as per your risk taking capacity.
5- withdraw some part of your profit and reinvest some part of profit to increase your portfolio.

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