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5 Tips to Help You Begin your Trading Journey on NSE

Trading and investing in NSE is now very popular among young professionals. But as the stock market is wildly popular for its volatility, it is imperative to be as cautious as possible when you begin. Five essential tips to help you start trading on NSE are discussed in this post.

The stock market is very popular for its volatility. It is this volatility that has kept a large number of people away from the markets in the past. However, the stunning returns that the market has generated in the past few years has attracted a lot of new traders, especially young working professionals.

NSE or the National Stock Exchange is the most popular exchange for new traders. But for someone who is new to this high-risk, high-reward asset class, it is very important to be as cautious as possible.
To help you begin your trading journey on NSE, we’ve created a list of 5 valuable tips-

1. Type of Trading

You can buy shares on NSE and sell the same on the same day or hold them for 2-3 days before selling. When you buy and sell shares on the same day, it is known as intraday trading, and if you hold them for 2-3 days, 2-3 months or more, it is positional trading.

Before you start trading, know what kind of trading you’d like to do as the factors you need to consider for trading vary significantly between different types of trading.

2. Know the Entry and Target Prices

A common mistake among the majority of the new traders is not knowing when to enter and exit a trade. Before placing any trade, it is essential to fix the entry and target prices and exit the position as soon as the target is reached.

Irrespective of how promising a trade looks, make sure that you exit the position once the target price is reached.

3. Using Stop Loss

Stop loss is a type of trigger that you place for reducing or minimising the losses. For instance, if you buy a share at INR. 100, and believe it to go higher, you can place a stop loss at INR. 95. If rather than going up, the stock starts falling, your position would be squared off automatically as soon as the price reaches INR. 95.

Irrespective of whether or not you’re sitting in front of your trading screen, your shares would be sold once the stop loss is triggered.

4. Get some Experience Before Short-selling

One of the best things about the stock market is that you can make money on both sides of the trade. You can buy and then sell stocks or sell first and then buy stocks at a lower price. The latter is known as short-selling and is done when you know that the price of a particular stock is about to fall.

Before trying to short-sell, make sure that you first get some experience with long positions, i.e. buying first and then selling.

5. Understand Technical Analysis

While mastering technical analysis could take years, you can at least start learning the basics before starting to trade in Nifty.

Some of the basic things that you should try to learn are understanding graphs of stocks, stock trend, overall market sentiment, support and resistance, and moving average.

Keep the tips mentioned above in mind and start small to make sure that you do not suffer any significant losses that can break your spirit at the beginning itself. While mastering stock trading requires a considerable amount of experience and knowledge, the tips discussed above would protect you from common mistakes and increases the chances of making profitable trades.
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