Trading in the stock market is not easy

Trading in the stock market is not easy. There are various precautions which the trader must take to trade effectively in Stock Market. There are equal chances of profits and losses in the stock markets. The things which the traders should avoid while trading in the stock markets are listed below:

1) Trading Without Stop loss: The trader should avoid trading without stop loss. The stop loss is an important tool which prevents the trader from incurring heavy loss. When the stop loss is triggered, a limited loss is incurred.

2) Selling Stocks in Panic: The trader should avoid selling stocks in panic. The trader should keep his emotions in control. When the trade starts going in the opposite direction one should not panic and should take decisions calmly.

3) Holding The Falling Stocks: In case if the trader has bought some stocks and the price of the stock is falling. The trader should not wait for longer time. Instead the trader should quit the trade by incurring a limited loss.

4) Blindly Following the Broker: The trader should not blindly follow the brokers. The trader should follow his or her own strategy and should not blindly rely on broker. One should be very confident about the trading decisions they take.

5) Trading with Penny Stocks: The trader should not trade with the penny stocks as the penny stocks are very volatile and the investment can be zeroed upon very easily in case of penny stocks. It is always advisable to trade only in reputed stocks.

6) Over Trading: The trader must avoid over trading. The traders should keep his emotions and greed under control. Over trading may cause heavy loss to the traders.

The trader should base one’s trade on the technical analysis or can also take advice from some advisory firm. These advisory firms provide accurate stock market tips.