Start stock trading like a pro when you exactly know what to do. Most people think that trading is like gambling. But what they don’t understand that trading is actually mindset and skill rather than luck. Those who depend on luck to trade can succeed once or twice, but they will eventually make losses. But to the pro, they might make losses a few times, but their overall profile would always be on the profits. Read further on how you can achieve the same.
Open a Demat Account
Demat account is the place where the stocks will be stored, when you buy them. This is mandatory for buying and selling stocks for trading. There are a lot of options to open a trading/demat account with. Zerodha is a well known name as a discount broker. You can open an account by clicking here.
Add Money to Trading Account
Add money to the trading account from the bank details you have added to the account. Once you transfer money, it will take a few minutes to reflect in your trading account.
Pick Trending Stocks
Open up any finance website/app like MoneyControl, ET and look for trending stocks. Normally these websites post these information before market hours. These stocks are picked based on information about earnings release, announcements, acquisitions, etc. Pick a few stocks from this list, considering all the news impact. Make sure to pick highly liquid stocks from the following list:
- Nifty 200
- Nifty Midcap 100
- Nifty Smallcap 100
Now filter the list with 3-5 stocks that you think will have the highest impact with the news.
Read Charts
Now go through the candlestick pattern of those stocks and see their performance of those stocks in the past few days. If the stock has already moved a lot in the last few days, then avoid those.
Wait for 15-30 minutes of market opening before making any trade. By that time, we should have 2-3 candlestick patterns to see the trend.
identify Entry and Exit Levels
Do not place a trade during the first 15 minutes. Wait for 3 consecutive green candlestick patterns to place a trade and exit at 3 red patterns. Place exit positions at around 2-3% profit and a stop loss at 1-2%. If there are 3 red candles, then exit the trade, even if the SL hasn’t been hit.
Plot the moving average on the chart, and place a buy order only when the price goes above the moving average line.
Place the Trade
Once you are sure that the price is behaving as per your expectation, then you can enter the trade. Once your order gets executed, then place a bracket order with the target price and SL. Stop Loss has been put in case the stock doesn’t behave as per your expectation. It also helps to keep the emotion in check, and avoids continuous monitoring.
Successful traders/investors may make losses in a few trades, but they tend to minimise their losses in losing trades and maximise their profits in their winning trades.
Follow these steps and start trading like a pro.