2May

Few mistakes which beginner traders make while trading

BTST Tips

Everyone wants to earn well by trading and many have opted trading as their profession. Only by willingness to invest in the market you can not make profit on your investments. There are various risk factors associated with making investments in market. Hence, traders prefer taking tips like commodity tips before making any investment. Also, to earn returns you need to be consistence and should have deep knowledge about market.

Trader basically buy and sell securities very frequently and hold the positions for very short period of time than investors. A new trader’s capital can be quickly swipe off by this shorter holding periods and frequent trading.

Here are some worst mistakes made by beginner traders.

1. Letting losses mount- The ability to take a small loss quickly if a trade is not working out and move on to the next trade idea is one of the defining characteristic of a successful trader. On the other hand, unsuccessful traders get paralyzed if the trade goes against them. And they may hold on to a losing position in the hope that the trade will eventually work out rather than taking quick action to cap a loss.

2. Failure to implement stop-loss orders- For successful trading stop-loss orders are very crucial. And traders who fail to implement them are making one of the worst mistakes that can be made by a novice trader. The losses that are capped before they become sizeable are referred to a tight stop losses.When a trader cancels a stop order on a losing a trade just before it can be triggered, because the trader believes that the security is getting to a point where it will reverse course imminently and enable the trade to still be successful and this is the common trading mistake.

3. Not sticking to a trading plan or not having one- Most of the experienced traders get into a trade with a well defined plan. They know the capital amount to be invested in the trade, their exact entry and exit points and the maximum losses which they are willing to take etc. Whereas, before the beginner traders commence trading they may be unlikely to have a trading plan. Even if they are having a trading plan they might be more prone to leave it than seasoned traders if the things are not going their way.

4. Trading too frequently- Overtrading can gradually destroy the returns to the point where nice profits will turn into significant losses. Experienced traders have learned the way that trading too frequently can severely harmful for the overall returns and performance. New traders are yet to learn this lesson.

Trading is very interesting and can be very profitable as long as the above mentioned mistakes can be avoided. Trading needs great knowledge about market and experience and if you lack these aspects you can face great loss. Hence, to minimize the losses and to increase the returns traders have started taking financial services from well known stock market advisory. With this they are able to invest with the some best investment ideas.

15Mar

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21Feb

Brief introduction to momentum traders and their types

In stock market there are different types of traders, momentum traders are those who are looking for movements in stock’s prices. Once they identify movements in price they take long or short position in that stock and hope that this momentum will continue in upward or downward direction. This strategy is more dependent on short term price movements and therefore trader here trades with stocks which are moving significantly in one particular direction on high volume. Time period for which a trader will hold his position depends on how fast a stock is moving. To earn good profit from market often traders prefer to use mcx tips of proficient market experts. These traders are very different from other as they only focus on stocks which are in the news. Whereas other traders gives emphasis to different fundamental factors, technical charts and graphs and company’s performance.

Types of momentum traders are discussed below :

1) Technical based momentum trader

These traders take decision on the basis of their perception that market is either being higher or lower than it is expected to be. To conclude this they study different technical factors. If they find that market is high then it is expected then they take take short position in stock and buy it later. On the contrary of they find that market is low than it is expected they buy stocks and sell them later.

2) Event based momentum trader

These traders take decision on the basis of different factors. They usually look for volatility in market which is caused because of some specific news or event in a particular trading day. When any news hits the market different traders perceives it differently and because of it high volatility is witnessed in the market. Once the news reaches mass traders market becomes more volatile and stocks affected by it tends to swing in one particular direction and this movement last for some time. Momentum traders make use of this time and plan rapid trades during it to earn maximum profit. These traders needs to be very attentive in market , a delay of seconds also can make them miss a good opportunity.

We can conclude by saying this momentum trading is all about identifying stocks which are showing strong movement in any one particular direction and are likely to last there for some time. Traders need to have exceptionally good knowledge about market for using such strategy and also they should be able to perceive different market news and updates correctly. Then only they can take the right decision and earn good profit for themselves. They can also follow share trading tips as suggested by experts of market to ensure that they are on the right path. Discipline and patience are two qualities which a momentum trader must have as without them it is really difficult to succeed in market.

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