Here are mention 5 golden rules to improve your trading;
1. The 2 per cent rule portfolio management rule
The 2 per cent rule is the entire to do with better portfolio management. The better rule is never to risk more than 2 per cent of your portfolio on one trade.
You have a $4000 portfolio, 2 per cent of that is $80.
This means your stop loss point should never exceed $80.
By doing this is the make it simple to control over your stock market portfolio account. By sticking to market rule you do not run the risk of the big losing amount of money in one go, losing a big amount of money is enough to put any trader off investing.
2. The ratio of risk reward
The ratio of risk reward is the theory that you less risk money than you probable reward. When stock market trading a stock your stop loss would be your point of risk and your exit point would be your better risk reward point. The ratio of risk reward must always be 1:3. If you apply this ratio you can reduce over 50 per cent of your trades and still make more money, here is mention how;
You make 3 trades and your stop loss is at $200 and you have a risk reward ratio of at least 1:3
Trade 1 loses $200
Trade 2 wins $600
Trade 3 loses $200
You win only 33 per cent of your trades so far the more profits and loss would be +$200!
3. Develop better trading strategies
Don’t go into trades without any better strategies. Two types of strategies short term and long term strategies whether you are long term strategies and you have done your depth research on a company throw fundamental and technical analysis, or they are short term strategies and you have better researched a company’s throw a chart pattern (technical analysis), it is very important that you have a strategy in place. One of the most common activities in the stock market is most of trader follow a better stock tip like Stock Tips, Commodity Tips, Option Tips and Nifty Tips etc from their ‘buddy at work’, not researching the stock consequently and themselves losing money (it happens!).
4. Record your trades
It is very important that you record your trades. If your adviser or broker doesn’t record your trades (they really should do) then you should record manually them using Not Paid or Excel sheet or ms office or a similar program.
By recording your trades it becomes very simple to scan over your trades, find out what you have been doing wrong and find out what you have been going well. It is very important to analyze your trades if you are going to get better as a stock market trader over time.
Here is mention best stock advisory company he will manage all records like how many calls given a Clint and many more record throw a CRM. Here are providing Stock Tips, Equity Tips, MCX Tips and Option Tips etc.
5. Use stop losses!
This is the bottom line but the most important rule of investing in the stock market! Stop losses help you control your losses and very much reduce the risk involved with stock market trading.
A well-known stock market quote is “Poor traders let their losses run and reduce their profits short, good traders reduce their losses short and let run their profits”. Always stop losses allow you to reduce your losses short, which mean if you use them you are already to becoming a good trader! Every one you have to do after that is let your profits run!
Think you can manage the 5 golden rules to trade stocks? Give it a go with a free Stock Tips, Commodity Tips, Forex Tips and Option Tips etc. Or if you are enough confident you can do yourself.
Why do stock prices go up and fall down?
The vital reason for market movements in a company’s price of stock is due to demand and supply.
A price of share usually moves up when…
- A performance of company’s goes beyond expectations of the public.
- Many people want to buy the shares to cut the rewards of the profits.
- Not a lot of people want to sell the shares.
- There are not a lot of shares left.
A price of share usually falls down when…
- A performance of companies is disappointing compared to prospect of the public.
- Many people want to sell the shares.
- Not lots of people want to buy the shares.
- There are a lot of shares.
However there are numerous external factors that affect a company’s price of stock. Often latest news about a company will drive the price share go up or fall down.
Let’s say a company announces they are expanding operations into a new market that has lots of new potential for growth – this may increase the price of the shares because shareholders will expect a higher rate of earnings growth. Equally, if a company declare that there was a problem with a new highly expected product and its product begin was going to be late, the price of share would likely go fall down because investors or trader would be upset and less expect sales of the product. Usually many fear or uncertainty will drive shares fall down. And many excitement and hopefulness will drive shares move up. Overall conditions of economic can influence behavior of the market’s overall and drive shares of most stocks go up or fall down. When the strong economy overall, shares are more likely to move up. When the weak economy and there are bad economic situation such as recession, most of shares of stocks will tend to fall down. Others factors of macro-economic effecting the stock markets include rates of inflation, rate of employment, natural disasters and interest rates. Other factors influencing behavior of the individual company’s shares include company mergers, job cuts and changes in company management to name just some one.