The Indian Stock Markets have witnessed a churning over the last year because of global uncertainties. Fortunes have been made and lost on the stock exchanges, as they offer high leverage and phenomenal returns. Intraday trading can turn you into a Crorepati overnight if you can get your timing right. It has never been a better time to invest in Indian equities.
The Bombay Sensex is currently trading in the 26,000 range. Some analysts have predicted that it could touch 29500 by the end of FY17. This means you can easily earn 15% on your investments if you invest in the frontline stocks over the next 8-9 months. If you are new to the capital markets and are still learning about how to do online share trading, read the guide below.
5 Strategies for Online Investors
- Keep Your Emotions in Check
Greed and Fear drive markets around the globe. If you can gauge the general investor sentiment and adapt your trading strategy suitably you can make a fortune. Intraday trading requires you to be disciplined or else you could end up incurring heavy losses. Do now allow your emotions to cloud your decision making abilities.
- Be Realistic
Do not start trading in the stock markets expecting to make phenomenal returns overnight, you will be disappointed. Most long term investors manage to generate a return of only 10-20% annually. Invest in frontline stocks which have a history of paying regular dividends and a good management. As an Intraday trader you must budget to handle losses which are quite common in online share trading. Investing in penny stocks is the road to ruin!
- Follow The Hot Money
Foreign Investors can move markets and stocks. Hedge funds which have billions of dollars in corpus are known to buy low and sell high with an incredulous regularity. As a new investor it would be prudent to follow their trades and replicate them in your trading portfolio. Another class of investors who are always ahead of the herd are Venture Capitalists (VC’s) who invest in startups and unlisted companies. Remember to keep a tab on your favorite VC’s investment portfolio.
- Avoid Trading in the First 30 Minutes
When the markets open, trading volumes are low and novice traders should avoid placing a trade. The order books are usually sparsely populated and placing market orders could result in freak trades. Most professional traders avoid trading when the market opens. You must be patient and wait for the right opportunity to arise before placing your bet on the winning stock.
- Maintain a Journal
Successful traders learn from their failures and the best way to do this is to maintain a journal recording your trading positions daily. You should analyze your trades at the end of the day in a non-partisan manner and record the lessons learnt. By analyzing your successes and failures you will become a better investor. This is one of the most common habits that you will find among successful traders
These are the five strategies that can make you a successful investor and trader, let us know about your opinion in the comments below.