Stock Market is a virtual place where you can make tons of money. This is the place from which you can expect a huge return on your investment by applying stock market mantras. However, most of the retail investors tend to lose their hard earned money in stock market despite a huge opportunity in the stock market.
Retail investors like you and me always failed to make money from stock market due to lack of basic knowledge and indiscipline trading and investment strategy. If you have traded in the stock market then you will be amazed to know that strange thing happened in the stock market. I am pretty much sure that you will agree with it also.
Whenever you buy any stock it started falling and the moment you sell your stock it rises. Recall something! Sounds familiar. right? Did this kind of weird things happen with you also? This is the real and hard fact and it happens with almost all the retail investors.
The main reason behind this is absolutely your sentiment and lack of patience. After losing your hard earned money, you started to blame yourself and the stock market. Are yaar! Ye mere saath hi kyun hota hain? Trust me this happened to me also when I was an amateur trader. Are you following top 30 or 50 stocks? Are you buying and selling stocks on rumors and news?
If you really want to make money from stock market, then you need to know how it actually functions. Believe me and follow this 3 awesome stock market mantras and you will not lose money.
Trend is friend – Follow Trends and Patterns Of Stocks
I am very sure of one thing that you are not following the trends and patterns of stocks while trading in stock market. Suppose you are following a particular stock say India Inc. and say it is trading at 100. It started to moving upwards from 100 to 120, 120 to 150 and reached 200 levels. In the chart, it looks like that it is in an uptrend and forming bullish patterns. You are still watching the stock rising but you haven’t bought the stock yet.
The stock price of India Inc. started to consolidating in the price range between 190 to 210 for some time and then started to fall. Now the stock trend is reversed and in a downtrend. It keeps falling from 200 to 100 and you are still watching the stock from 100 to 200 and then 200 to 100.
You are seeing the stock price again at 100 now and wishing that why I didn’t buy the stock earlier when it was at 100. Now you are assuming the price will again move upwards and reach 200 and finally, you buy the stock at 100 levels.
The moment you buy the stock at 100, it falls because the stock is in a downtrend and the stock goes down from 100 to 70, 70 to 50. You actually bought the stock when it is in a downtrend and forming a strong bearish pattern. The stock again consolidating at around 50 levels for months now and one day it gradually started to moving upwards forming bullish patterns.
The trend is again reverse from downtrend to uptrend and the stock price comes again at 100. You are now feeling fortunate as the stock has come again at 100. Now you are thinking to exit from the stock and don’t want profit as you have held the stocks for months now. At this moment, you have lost your patience and wish to recover your invested amount back as soon as possible.
You have waited for months now and didn’t make a single penny out of your invested amount. Finally, you sell the stock at 100 and the moment you sell, the stock started to move upwards and reach again at 200 or may even break the levels too. You have sold the stock when it was in uptrend again.
And then again you started to blame yourself and the stock market that whenever you buy stock, it falls and the moment you sell, it rises. So, finally after months of waiting you make no money just because of your sentiment and your impatient behavior.
You didn’t follow the stock trends and patterns and blaming the systems at the end. Catch you! right? From now on remember these stock market mantras whenever you trade. Please follow trends and patterns of the stock as a trend is your friend and most importantly be patient.
Use Stock Market Mantras Instead Of Rumors, News, and Tips
Are you investing your hard earned money based on news, tips, and rumors? If you are doing so, then please stop doing this from today itself and follow the next stock market mantras.
Suppose a company India Inc. is about to announce its result and the promoters of the company or other big bulls of stock markets already know that the results are positive. So, these people started to accumulate the stocks before the results get officially declared. At this moment this news is known to only the promoters and other people who are sitting at the top.
When this news coming down from the upper level, more and more people know about the results and starts buying the stock. Because of huge demand in the market, the stock rises say from 50 to 80. Finally, the company announced the results that it is positive.
You come to know about this news and you buy the stock at 80 which has already been appreciated by 30 points. Now the promoters or the big investors start selling their stocks as it has run up for 30 points and they sell in big volume. The stock started to fall as there was huge selling pressure from the promoters and top-level investors.
It may happen that you may not be able to exit from the stock as it is hitting lower circuit daily. So, follow these stock market mantras of not trading based on news, tips, and rumors. You will not lose a single penny of your hard-earned money.
You want to make money in stock market and it is equally important to safeguard your money as well. The stock market will provide you end numbers of opportunity to earn tons of money. All you need is capital for investment and grab the opportunity as you see it.
You can protect your money by using STOP LOSS which is my last stock market mantras. STOP LOSS means stop your loss in the stock market. It lets you keep your capital intact so that you can invest in other stock.
Suppose you buy India Inc. at 100 and keep the STOP LOSS (SL) at 94. You need to exit from the stock if it hits 94 or trading below 94. If you don’t take 6 points loss then it may happen that you will make huge losses. Even you may have to wait for long periods also.
So always trade with a strict STOP LOSS and exit as soon as possible if SL triggered. This is the last stock market mantras, following which you will not lose money.
If you have any doubts or you need any clarification on stock market mantras then comment below. Like and share this post as many as you can so people like us don’t lose money. Happy Trading!
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Author: Ratan Kumar
Ratan Kumar, an enthusiast stock market trader & blogger. Forecasting stock market moves with the use of technical analysis since 2008. For the technical trader & investor, new or experienced, he provides legitimate and valuable advisory from day trading to long-term investment horizon and helped thousands of investors to make money out of stock market.