The Big for every novice trader – How to buy stocks online like a professional trader?
Where do a novice trader start from? What are the processes / strategies he needs to learn?
All these baffled traders who wants to buy stocks online.
Understand the basic trading processes / learnings one must undergo for every trade.
STEP 1 Choose your trading style
This is the 1st step in “How to buy stocks online” and the most important of all. You should know the trading style you would be comfortable & would look to perfect at.
Trading styles are dependent on how long a trader intends to carry on a trade and they decide your risk/ reward for every trade & trading strategies you need to follow.
STEP 2 : Choose your preferred market to trade
To be a successful trader, you need to understand what market/s you would be comfortable to sustain in the trading business for long.
I know, initially it would be very difficult to decide where your expertise would be – Cash market, Futures, Options, Currency (Forex) or Commodities market. Click here to understand how to decide which markets to trade.
STEP 3: Study the market
This is the 1st step in going for the trade. Study & analyse the Market well to understand the market direction & sentiment (bullish, bearish).
One can look up Advance / Decline Ratios for each indices (of Stock exchanges) to check the market sentiment – Bullish or Bearish.
STEP 4: Stock Screening
Once a sector is chosen, one needs to do in-depth research using charts & indicators to find out the stocks that can be traded in the particular sector.
Then the best stocks with the highest reward / risk ratio are selected for the trade. Check out how I screen stocks for trading.
STEP 5: Trade Planning & Execution
After the stocks have been identified for trading, one needs to plan his entry, exit price and stop loss prices.
Before one enters a trade, he should know when to exit and how to minimize his loss if his trade goes wrong through a stop loss. This is the most critical aspect of trading.
Only after the plan is frozen, he should go ahead with the trade execution
Trade Execution:
- Entry Strategy
- Putting Stop Loss
- Exit Strategy
Entry into the market: After your have done the required research and selected the stock, its time to buy or short sell (yes, it is possible to sell a stock before you owned it).
Always choose your entry price, stop loss & target before you enter the trade. Trading discipline is very important to remain in trading business.
Click how you can make good entry strategy with minimal risk.
Lastly & most importantly, learn to manage your trade well.
If you ask any good trader, what is the most important thing in trading one needs to really learn. He will say managing a trade.
Because managing a stock bought is much more difficult than doing all the hard-works for scanning stocks, research to buy the stock, etc . An ill managed trade can make all your big profits turn in losses in seconds.
Ready to take the next steps in Pro Trading!!
Click here to find out few popular trading strategies of Stock Pros.
