Tips To Get Higher Returns From Share Trading

Last Updated: 2 Jan 2024

For decades, the stock market has been a lucrative opportunity for investors worldwide. Particularly today, as the stock market has gone digital, it attracts a larger number of participants than ever before. One of the most popular means of participating in the stock market comes in the form of trading shares. However, success in share trading depends largely on the amount of research, market knowledge and skills.

Place value in Technical Analysis

Technical analysis refers to a means by which traders can effectively examine and predict price movements and market trends. They do this by researching historical data and identifying patterns by the means of charts and other data representations.

Limit your Focus

After you open a trading account online, exploring the stocks is an option but it is recommended that you drive your capital and energy on the few stocks in which you have a high level of confidence. Developing expertise of your share of good stocks is far more favourable than frantically looking around for unfamiliar opportunities.

Stay updated

The stock market is ever-changing, with new trends and developments influencing it regularly. Often, the key to earning high returns is knowing which way the market trend is heading. The most effective way of achieving this is by staying up-to-date with the latest financial and market-related news.

Short your stocks when needed

At times, when traders find a favourable investment, they prefer holding on to it. However, during bearish trends and falling markets, this strategy can backfire if you’ve only opted to go along with your trades. Instead, sell them at higher purchase prices only to buy them back when the price decreases as this strategy can increase your chances of profiting from price movements.

Focus on your trade training

The prime advantage of having a share trading account online is that you can trade at your convenience and at any time. This convenience of time plays a crucial part in the world of share trading. As an experienced trader, you must develop the skill of knowing the times at which the market is most volatile and when the price movements are most likely to fluctuate. Timing your trade according to the favourable time frames is an important skill.

Diversify

The adage of “never put all your eggs in one basket” effectively applies to share trading strategies. Even if a stock looks like it is guaranteed success, make sure to not place all your money on it. Instead, try to diversify, ie. distribute your capital in stocks from various industries and sectors.

Conclusion:

Like all investment opportunities, the stock market can be favourable only when you are equipped with the required research, skills and tools. You can consider opening a share trading account as well as a Demat account with one of the most credible financial institutions like IIFL. Within a single trading platform, IIFL allows traders to invest in multiple securities efficiently as well as conveniently.