How To Earn From Stock Market


Here we are going to discuss earn well from stock market. We will detail what are the basics and how to secure a good earning from stock market. We will also discuss some basic rules that should be definitely followed.

A stock is the share of a company available for buyer and seller in equity market for trading at an agreed price. Stock are traded via securities listed on a stock exchange as well as traded privately.

Stock market always attract investors specially new ones to the market as its quite lucrative and most of them try to take its help to become a little rich due to some history about it. Stock market is always having a rule with the exceptions but still some rules are not that much shaky and people need to follow them with a faith of say 99 percent. This rules help investor to enter the market with long term view plan. The most indisputable stock ideas are elaborated to have a better understanding of approach towards market and every stock market investor must be aware of them when he enters the market.

Always invest on gainers not the losers in stock market


People often invest in loosing stocks and they invest more after prices are more down to average prices to be gone down but this practice is disastrous. Nobody knows when the stock going to rise and investing in something that is already loosing in hope of rebound can be big gamble. In this volatile world of stocks its really very tough to predict when an stock going to rise again. Lets say if the stock went down that bottom where its worthless so you will loose all your investment. Although some analyst suggest to keep selling your good earning one and holding the losers but its very difficult to do that in practice. You need to learn to ride to a gaining stock and not leaving it after it gives you some good success to balance the losers. This theory will never let you get success in stock market by limiting your gaining stocks.

One also need to learn to sell the losers as hoping them for bounce back is like waiting for a jackpot. If someone is loser no body can say that it will be gainer after some time by any rule. You should apply a realistic approach and not to expect some magic. Although its tough to accept that your share is loosing its better to be realistic about your mistake and preventing it from further damage before its wipe out you completely. Both the case should be judge with the merits of company as per your research. You have to decide if price is justified or not for that company for future prospect. Never ever let your worries rule over your mind to loses in gains and gains in loses. Some time investors try to average his cost by investing more on a loosing stock but that means you are running after a loosing money and it will never bring your loosing money but instead it drive you to go more down with it. This happens when people don't able accept that their choice was wrong and they start fueling it more to recover something from it. The money you lost is lost already and the money you are currently investing is a new money which is further in the risk so although in paper it looks convincing a bit but actually you lost a good amount of money.

Never go for the tips from others in stock investment


The money hard earned by you and no one cares it that much than you so it is always a better idea to do some research and then invest in the stocks that looks good to you potentially and financially. You should always avoid tips coming from your brother or father or friend or for that matter even with the brokers. If you bank on the tips from others that means you will learn it hard way and its like a gambling. Some time gamblers get lucky but most of the time a new entrant has chances of losing in it. Even if you succeeded in your first endeavour in the long run as you don't know the skills and the art of the stock investing so it will be very difficult for you to maintain success there. You should learn the art of information filtration and what to hear and take action and what to ignore.

Avoid panic after stock investment


One need to be have with brave heart to be an investor in stock market and you don't need to panic on the movements of stock market upwards or downwards. You should always focus on the big steps of the stock and need not worry about the short term volatility. Although expert traders gains from the every momentary gains and loss of stocks but long term investors are benefited by different theories so you should understand that short volatility rules not apply on long term trader. You need to learn the basics very well and then trust on your ability to earn in stock markets.

Investing in stocks via loan or debt or borrowed or leveraging money


Some investors borrow money to invest in stocks which is known as leveraging. Many investors are got overconfident with the same rule as its not their hard earned money and only looks in papers so they got over enthusiastic and invest abruptly with high hopes forgetting the other side of the coin. The interest rate is also high on this money so if stock prices are rising they get a good amount of money but not substantial compare to the loosing scenario. When the market looses these kind of investors completely lost their investments due to paying of interest and looses which was not seen in the event of gains. So its very much advisable to avoid leavening or borrowed money to invest in stocks.

Mistake of the Price earning ratio or P/E ratio evaluation in stock investment.


The people who are new to investing in stock market often advised by experts to give much importance to the price-earnings ratio (P/E ratio). There is absolutely no doubt for a quick glance its a good tool to decide about a company health but this is included with others factor too and only using it for judgement of investing is very wrong, and should not be followed by investors. This P/E ratio should be understood with its context, and its used along with other methods or analytic methods for a stock. A stock with high price-earnings ratio should not be interpret as overvalued stock or similarly a low price-earnings ratio should not be understood that a company is undervalued.


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Comments

Author: Ramesh Rankawat15 Jan 2013 Member Level: Gold   Points : 4

Every one want to earn money through share market but few can make money by Share Market, the main reason of failure in Share Market for most of people, they don't have patience.

In Share market patience is most important things, all brokers gives a limit and people buy shares more than their deposit and they use limit but after five days they have to sold these shares in current rates, if you have no extra money then you will bear a loss because shares prices may be lower then you buy.

Investor should read regularly articles on Share Market.

Author: Pravat Kumar Das02 Sep 2014 Member Level: Gold   Points : 5

Earning from stock market need four things.
1- Knowledge about share price movement .
2- margin money for investment.( Money makes money)
3- experience and patience to make profit.
4- Luck.

You can not avoid any of these and need to maintain the above things together to get success.
So before you plan to start Investment in share market first of all try to learn and gather information which increase your knowledge about share trading.
Then join a virtual trading platform (moneybhai (dot) moneycontrol(dot) com) where you can trade and place order with the help of virtual money.
Neither you make profit nor you make loss but you learn a lot and gain experience.
Then start real trading with a smaller amount to check your own knowledge level.

Once you become expertise means you can become rich in some period of time through share trading.



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