5 Best Practices in your initial journey of Stock Market Trading

 

Money making can motivate anyone and this is one of the major reason people start their journey of stock market trading. Your trading income is an essential part of your financial freedom and can inspire you to improve your trading.

One of the most important question is “how much return one can realistically expect to make in first year of trading?” is one of the most frequently asked question also.

What Kind of Earnings Can You Expect from Stock Market Trading?

When someone starts trading stock options, they often have unrealistic expectations because of trading-related movies and TV shows, anecdotal evidence from friends, and online “gurus” who have no track record or professional experience.

 

Starting your trading career with inflated hopes will inevitably result in failure and let you down. Better to face reality now than false promise.  I would say that a 20–25% return on investment would be a reasonable target.

What do I Need to Know to Have a Successful First Trading Year?

Focus on consistent learning to improve your journey is the key. Before we start, we must have understanding of basic concept and market and tools.

Below is the checklist and some key points that will help you going easy in your initial journey.

 

Stock selection

Identifying the Trend of Market

Following the market Trend

Tools & Technique

Risk management

Clear Mindset

 

1. Initially, paper trade with a modest sum of money

New traders should back test and paper trade everything first. By doing so, you can practice placing orders, modifying trades, and can learn from errors without risking actual money.  

 

2. Recognize the common mistakes to avoid

After you’ve learned what NOT to do, spend some time mastering your skill and strategy and avoid common mistakes.

 

3. Trade Consistently - don’t stop after a small losing streak

 

Many People give up after a run of three to four bad trade. This is regrettable because those losses are the best teachers, particularly early on. Although it’s inevitable to lose money when playing, how you handle it can make all the difference.

 

Maintain journal of each trade. Examine each element of the trade-

Why did you choose the trade? why did you make long or short positions? Did you take right decision?

 

4. Develop your Trading Strategy

 

Trading with a sound systematic trading method is one of the best way to successful while trading. Never make any trade on your gut feeling.

 

5. Expecting Financial Independence to happen instantly is Unrealistic

Remember “Rome was not built in a day”.

Focus on low risk , High -frequency trading with systematic designed strategy to generate regular income.