TRA How To Win At Trading Account This 2020?
Stock trading in India is gaining momentum day-by-day. Stock market resembles more like a game which expert investors play. Those who are not new to the trading scene know the fact very well that money doesn’t come easily. You need to be risk-tolerant and aggressive to expect returns.
Trading is difficult, as one must buy the right stocks and hold on to it for a reasonable time to build potential wealth as the market is volatile. Therefore, traders always swear by the proven strategy of “Buy Right, Sit Tight.” Many people are now engaged in buying and selling of shares for wealth creation that will provide them financial security to meet long-term goals. This whole process refers to trading. The investment is managed by an investment dealer to trade shares for an account holder. The trading account consists of Cash Accounts and Margin Accounts.
Open Trading Account in minutes:
- Compare & find the best broker or a firm
- Fill the form & submit it along with necessary documents
- Undergo the verification process
- Allotment of a trading account number, once the application is approved
- Start trading with the assistance of investment manager
What is the difference between trading & demat account?
In case of trading account, there is buy and selling of shares in the stock market, whereas demat account is like a savings account that allows you to hold on to your shares in electronic format.
Five ways to win at buy/sale of stocks in the trading account
- Realise your end goal: Invest in stock not to gain money, but to avoid letting your capital depreciate. This is often the problem with novice, as well as experienced investors. Hence, make sure you realise the end objective while trading shares.
- Quality of stocks: The golden rule of trading is to look at the quality of business, rather than the price of a stock. As Warren Buffet has rightly quoted “When I buy a stock, I think of it in terms of buying a whole company, just as if I were buying a store down the street.” Look at the products offered by the brand, overall sales, competition and analyse how the brand cope with the changing trends.
- Recommendations of stocks: Always avoid stocks recommendations. The best way to win at trading is to do research and analyse the market. For first time investors, choosing the right one could be difficult. You can also hire a portfolio manager, who will guide and help you figure the best performing stock.
- Value of stocks:When it comes to determining the value of a stock, it depends on the ratio. P/E as in price-to-earnings ratio is the main metric investors use to know the proper value of a stock. If the P/E ratio of most companies is higher than the industry average, then probably the stock is overvalued. However, if the P/E ratio of a company is more than the current price, this means it is undervalued. Undervalued stocks are considered as the best bet for investment.
- Avoid hot stocks:You are operating a trading account; make sure you avoid hot stocks. Hot stocks tend performing phase and non-performing phase. They are highly hyped in the trade market due to high fluctuating prices, severe volatility and high trading volumes. Opt for stocks that are performing consistently.