The 6 Basic Rules of Stock Trading Every Beginner Should Know

Basic Rules of Stock Trading Every Beginner Should Know

There are certain golden rules in stock trading that everyone should know to increase their success in the online stock broker in Malaysia. If you want to know more about them, then be sure to read through the rest of the article.

1. Start Small

Many beginner traders often commit the same mistake of investing all of their capital immediately after they’ve started. This is a huge error that can have a lot of potential consequences such as the risk of losing all of your capital, not maximizing profits, among others.

It is best that you do not commit all of your cash early on. Test the waters first, find the right company, and then invest only a portion of your total capital so that it will be much safer to you.

Once you’ve established a good investment portfolio and you’re earning a good amount of profit, you can then branch out and spend more.

2. Never Do This Without a Plan

In just about any risky undertaking, it would be foolish to go about it without actually having a plan.

The stock market is quite complicated and it will not go easy on you. If you go head first without a tangible plan, you’re going to end up with severe losses to your capital.

Therefore, you must sit down and write your desired plan of action. Make sure that every point is detailed and do your research to give you more accurate data so that you can act accordingly.

3. What are Your Financial Safeguards?

 

There is this concept of being bullish or bearish. Bullish investors are people who understand that the market prices of their shares are going to increase, so they make a move. Conversely, bearish people are ones that deem the price of a stock would fall and they make trades based on what is ideal for them.

For example, buyers are said to be bullish if they buy the stock now, expecting that its market price will increase. Bearish people will sell the stocks that they have and they expect it to fall.

4. Keep Yourself Informed

There are a number of factors that can affect that stock market prices. Some of them include the company’s growth (or lack thereof), sudden shifts in the economy, different market movements in different industries, and a whole lot more.

By keeping yourself informed, you can make a decision to either trade your stocks or hold on to it until the market gets better. You can watch some business news or read the papers.

5. Discipline and Patience over Emotions

The more logical the investor is, the better the outcomes he/she experiences. Maintaining a level head when making stock market decisions can really give you a much broader perspective- allowing you to see things more clearly so that you can react accordingly.

If you base your decision-making on emotions, it can be pretty risky as you’re not going to be able to see a particular situation in different angles.

6. Learn from Real Gurus

There are so many world-renowned investors already and the things that they’ve done that made them successful are still useful to this day. Learn from the greats such as Warren Buffett, Benjamin Graham, Jesse Livermore, and more.