You are right, online trading can be very fruitful and fetch you profits beyond your wildest imagination at times but for this you have to be well informed about the whole process and well versed with the market trends. Otherwise, leave alone profits you could lose the entire amount invested, so be very careful when you start off with online stock trading.
Online trading in simple words is a term which refers to the medium through which an investor enters and executes trades. It is not really proper described when online trading is referred to as a trading style. Online traders, both short term and long term investors, access and execute trades using an Internet connection or a direct access online trading platform with online brokers.
Trading with money you just can’t afford to lose
Trading for the heck of it and with an egoistic mind
No proper trading plan
Lack of proper records
Changing strategies too often
How to make online trading profitable
There is nothing like being well informed about the market trends which is most important for any trader or investor and for this it is essential to go for market information software though your broker has extensive tools like indicators, news feeds, charts, and price history. It is advisable to get an independent package from a specialist company and you will be richly rewarded.
The next most essential thing to do is to take the help of an experience mentor who is simply indispensable mainly to the new investor. With help from this quarter you will be able to assess the direction that the market is going to take and act in accordance to that.
Some of the golden rules for online trading
Don’t put all your eggs in one basket; divide your capital into parts and invest in different trades to stay safe
Trade within your capacity and capability both financially and otherwise too
Trade in active stocks
Don’t get into online trading if you have no serious intention of investing here
Don’t let anxiety or impatience make you enter or leave the market
Never over trade
Don’t allow your profits to turn into losses; use trailing stops for locking and protecting your profits
Don’t be over enthusiastic or greedy to make more and more profits
Don’t be misguided by rumours or tip offs
Always be aware of the risk of losing
Don’t average a losing trade
Trade only with genuine risk capital
If you are still hesitating whether to take the plunge or not let me tell you that you will succeed in achieving your goal if you stay away from the common mistakes a lot of investors make while trading and if you scrupulously follow the golden rules of online trading you are sure to witness real big returns on your investments.
And all this only if you have spare funds to invest and only if you can afford to lose all of it! Look again at the golden rule for online trading and make up your mind if you can sincerely adhere to all of them; yes? Then go ahead with confidence and taste success in online trading!