Take an example of any successful trader in the stock exchange. The secret of his success is simple and straightforward. Plan and discipline! Internet has revolutionized the method of trading in the exchange as for speed and volume. The numbers of stock exchanges have increased and one can trade through any stock exchange sitting in the comforts of one’s drawing room. The numbers of brokers and investors have also increased substantially. Every commercial bank caters to the needs of its investing clients by opening Demat accounts for trading in shares. You may want to check out this article on stock trading plans from mboxwave.com for more.
The age of internet has facilitated written trading plans. The software selected by you identifies the area of support and resistance in multiple time frames and provides clues and targets to the traders, and also the specific areas to enter and exit the market.
Owning a computer and devising an online stock trading plan does not mean that you are absolved of the day to day research and analysis processes related to the trade. The computer will only follow the instructions and data that you have provided through the software. It is your helpful partner in implementing your online trade plans but it will not guarantee you success. By following the pre-set program, however, you may be able to save yourself from costly mistakes.
Before implementing your online share trading plan, it is desirable to start with certain preliminaries. To develop confidence and to get familiarize with the online procedures, do paper trading for a month or so and watch the results. You probably see that you have committed certain mistakes. In the real trade, you are sure to avoid them in future.To deal in shares through online, you need to have the tough and balanced mental attitude. The chances of gains are fast, and that of losses are also equally fast. Quick mode of dealing with the transactions is likely to trap you in temptations, resulting in losses.After deciding the quantum of the portfolio, set the risk level of a particular trade. It can be anything from 1% to 5% of your portfolio. If you reach that loss level at any stage of the day, stand apart and if need be, stay out. Do not insist that you must make profit for the day. There is always another day and opportunity.
Before you commence the trade, set a realistic risk/rewards and profit ratios. It is the practice with traders not to do a trade unless they visualize a profit three times greater than the risk. Accordingly, set your weekly, monthly and annual profit goals. You are switching on the internet not to begin with the trade immediately, but to know what is going on around the world, before the market opens. Every day is a crucial day in the share market. The fortunes that you have made through your intelligent and valiant efforts for years, can be wiped out within a day. Therefore, take the support of an online broker, and say hello to him everyday, even if you have no trade to make. He may advise you not to do any trade on a particular day, when the market conditions are extremely volatile.
To trade online through the broker is one thing, and to do online trade independently is altogether a different issue. The later option is full of risks, unless you are thoroughly conversant with the procedures of the trade and intricacies of the net operations. You are doing business through the computer and any distractions in the trading area can cost you heavily. Clear the RAM first and depending upon the trading system and program you use, label minor and major resistance levels, set entry and exit signals and take care of the alerts.