Trading is basically about making good decisions under less-than-ideal circumstances. If you master just some of the basics, you will have fewer bad days than your competitors and put yourself in a better position over time.

Take care of things like restating daily positions, calculating differentials correctly or knowing when to estimate. Sure it takes five minutes every morning, but there is nothing better to start your day with.

Don’t test the market.

It can be tempting to try out a strategy over a small simulated portfolio, but it is not worth the risk of real money being on the line if you are not sure whether it works or not. No matter how well you think you know yourself, there are just too many factors coming into play that can change quickly and which you cannot always control or foresee.

Find a mentor

It may take time, but great stock traders often choose to share their knowledge with other traders by teaching or publishing their work. How else would we have learned about Bollinger Bands or moving averages?

Do not be afraid to ask questions.

There is no shame in asking others about your ideas and looking for their opinion on your findings once in a while. There may even be times when you disagree with someone else’s point of view, but it helps to understand this person’s logic better than before.

Read the market

Daily papers, magazines and websites are excellent sources for keeping up to date with what is going on globally, whether you look for UK or latest news in hindi. This includes knowing which companies are about to report results as this could affect prices overnight and how other stock exchanges perform relative to London’s FTSE 100 index.

Do not get too confident.

You are only as good as your last trade. This means that if you do well over time, you should not think that everything will work out for the best.

Know when to quit for the day

This is often easier said than done in a competitive environment, but rushing will only get you into more trouble. Some of the best decisions I have made were not based on a feeling or a hunch but months of thinking and staring at numbers until I had it figured out myself.

Avoid FOMO (fear of missing out)

It is easy to get caught up in rising markets where everything seems to be doing well, but having an exit strategy set means you should have no reason whatsoever to enter into panic selling. However, when markets do decline, it is essential that you keep your cool and don’t follow all the other traders who have entered into a ‘fear of missing out’ state.

Set realistic targets

When setting targets for price rises in stocks, they should be set so that there is a steady flow of income from dividends if you hold onto the company’s shares long term.

Always factor in transaction costs.

Whenever you enter or exit trades in the stock market, it means paying commissions that can eat away at any gains made from share prices rising over time. Therefore, continuously checking the size of transaction costs means you can factor them into your trading plan and always have a realistic idea of what returns will be net of taxes.

Decide when you are going to trade.

Having a set time in which you enter the markets is essential because having a routine for making trades ensures that there won’t be any chance of not entering when the markets are at their peak, especially after months/years of study and research.

Finally

Trading in the markets is so much easier if you enjoy it because being relaxed about what’s going on means you won’t rush into trades and panic buy or sell when the market turns against you. Beginner traders should use a reputable online broker like Saxo Bank. For more information, use this link.