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How To Make More Money in Trading The Stock Market Successfully - Guidelines For Serious Stock Traders

Updated on June 10, 2015
lady rain profile image

Lady Rain works as a daytime stock trader and writes about crafts and hobbies. She likes travelling and making papercraft models.

If you have not traded any stocks before and thinking of becoming a stock trader, there are many things to consider before you put money in stock trading. It is not just about buying low and selling high. The best way to get started is to do some serious reading on how to start buying shares. Learn all the definitions and terminology used in the trading world. You can always rely on knowledge and hard work but not random luck in becoming rich. Read as many books on trading the stock market as you can, because knowledge is power. Learn how to open a trading account and what is required to start trading. There are many books on trading and a list of some of the books can be found in Top 10 Best Trading Books.

Stock ticker board
Stock ticker board | Source

Guidelines on how to trade the stock market successfully

If you are already trading in stocks and want to improve your trading skills, I hope you will find some of these guidelines useful for your trading business. Trading requires a lot of self-discipline and having some guidelines and trading rules definitely helps one to stay disciplined. To be able to follow strict trading rules and having self-discipline are important factors in stock trading. Here are some of the guidelines for stock trading.

  1. Study and analyse the charts. Before the market opens, spend about thirty minutes going through the previous day's trading prices and market trends. Write down your thoughts and analysis of each stock you are thinking of buying or selling.
  2. The worse thing for a stocktrader to do is to take tips or listen to rumours. Your buying and selling decisions should be based on your own reasons and not someone else's. This is the most certain way to lose money in the stock market. Usually by the time someone tells you a particular stock is profitable, the person would have already sold their shares and receives their profits. The stock could be on the way down by then.
  3. Check out the stockbroker who will transact your trades. Make sure the broker has a good reputation and not somebody who is just waiting to earn your commission fees. If you already have a broker but want to trade online, find out how to open a trading account with an online broker.
  4. There should be a trading plan for each trade you intend to buy or sell. Always research on the stock you want to trade in. Write down the reasons why you want to buy or sell that stock and how much is your target profit. Before buying a stock, you should already work out when to exit a stock if things do not go as planned.
  5. Keep a diary of the day's market action. Note down the current market trends and any unusual market action and prices you observe on that day.
  6. Be aware of the market, both local and overseas. Many times, the local market is always affected by overseas markets, and global events that are happening.
  7. When you are ready to make your first trade on a stock, start with a small amount of money. Do not put all your money on a single trade even though you think that stock is going to make money because nobody can tell what is going to happen tomorrow. You will be able to build up your trading portfolio when you have made a few successful trades. Remember: greed is not good.
  8. Place automatic stop loss orders to prevent further loss. Stop loss orders can prevent all your capital from reducing to nothing in the event of a market crash or price crash.
  9. As with any other investments, there are risks in stock trading too. Risk only the amount you can afford to lose. Always work out the percentage of risk you are willing to take before buying and be ready to exit the market when or before the stop loss limit is reached.
  10. Bad traders ignore and repeat their own mistakes. They put the blame on others. Good traders learn from their mistakes. Only those who are willing to learn from their mistakes will succeed in trading.
  11. If you cannot find a stock to buy or not sure about a stock, then don't buy. You will never lose money by doing nothing. Wait until you think it is the right time to make the winning trade.

Top 10 Trading Books
Top 10 Trading Books | Source

© 2012 lady rain


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    • lady rain profile image

      lady rain 5 years ago from Australia

      PinkWeddingDresse, that's great, whatever method works for you, just continue with it!

    • PinkWeddingDresse profile image

      PinkWeddingDresse 5 years ago from Singapore

      I trade stocks too. I like Benjamin Graham's value trading method.

    • lady rain profile image

      lady rain 6 years ago from Australia

      CapstoneTrends, thank you for stopping by to read these guidelines. Cheers.

    • CapstoneTrends profile image

      CapstoneTrends 6 years ago from Outside Boston, Massachusetts, USA

      This is great! Thumbs up!!

    • lady rain profile image

      lady rain 6 years ago from Australia

      Deborah-Diane, that is where the diary comes in useful, for writing down market's action, prices, important news about the stocks, plus your own observations. There is no need to panic when things are changing fast. If prices are going up, everything is all good. Stop loss orders will protect the capital with minimal loss(if any) if prices go the other direction.

      Thank you for for stopping by to leave a comment. Have a great day.

    • Deborah-Diane profile image

      Deborah-Diane 6 years ago from Orange County, California

      This is all good advice for anyone planning to become a stock trader. The more important factor is to do research and watch your stocks. Things can change fast!