Free Stock Tips

1. Don’t keep all your Eggs in one basket: Never ever put all your money in one stock or in stocks of same industry. I would rather say never invest all your money in stock market. Distribute your money in Bank, Property, Stock Market, Bond, Mutual Fund, Gold etc. And in every type of investment again diversify. So even if one investment fails it doesn’t hurt that much.

2. Never Get Married to your Stock: One of my friend bought a stock at 2400 & still holding it at Current Price of 7. Yes from 2400 to 7. I think he is married to that stock, hoping one day he will get his 2400 per share back!! What rubbish!! When you make a wrong decision just accept it & get out. Don’t Wait.

3. Always use Stop loss: How would you know that you have made a wrong decision? Simple before you get in to any trade write down how much loss you are ready to suffer if trade goes wrong? 2%, 4%, 10%, 15%? Set a stop loss in your mind at that much % below your cost price. That’s the price below which if stock price goes, then you should sell the stock & get out. Don’t feel bad if stock moves back to your cost price after you sold it. Once you sold the stock its over. As they say never keep in touch with old girlfriend.

4. Buy at bottom Sell at top: Simple? Yeah. But its not. Because if it has been followed by majority they wouldn’t have lost so much money in market. Always remember one secret, which can guarantee you success in stock market. Every six months or a year market falls by 30%. That’s the time to buy. On the contrary what every one does is buy stocks on the news of stock market making new highs. Rather that’s the time to sell. Always remember Buy on Low Sell On High. The Gap is your Profit.

5. Stay Away from Fear & Greed: Fear & Greed are the biggest enemies of Investor. Only way of staying away from them is to have a good trading plan before you enter in to trade. Your Trading plan must have solution for trade going wrong, how much profit you want, how you will book part profit. If you stick to plan you can over come Fear & Greed.

6. Don’t Average out: Average is nice concept. But if goes against you then nothing bad like it. If you have stock bought at 170 which is now at 90. You are making loss of 80 per share. Now if you buy more shares at 90 your average price will come down from 170 to say 125. If stock makes a move from 90 to 125 you can get out without making losses. But if it starts to go down again from 90 then your losses will increase as you have added positions now. Rather a average is good option when you are making profit. As the price of your stock goes up keep buying some more.

7. Don’t catch the falling Knife: Think if a knife if falling from sky would you run to catch it? No way!! But most investors do. Stock having price 150 when available at 130 people think it’s cheap now & hence should buy. Then the stock goes to 100 & people do the same. The same stock goes to 80 & again same thing repeated. If you see chart of that stock you will see a formation of falling knife. One should wait for stock to settle down & then buy it if it starts up move.

8. Never follow any ones tips: There are thousands of Experts in the market. Most of them don’t know much of Stock market. Still investors pay them for there advice. A simple question any such investor should ask him self why this expert is not relaxing at any Beach resort (after having earn huge money) if he has so much knowledge. Why is this man giving stock tips for few bucks instead getting rich by using those tips? Always make your decisions in your life, in case they go wrong at least you won’t regret.

9. Borrowed Money: Never ever buy stocks with money you don’t own. You should only buy stocks with your own money that to if you don’t need it in near future & you don’t mind losing big part of it.

10. Time: This is the most important but least talked about aspect of stock market. Every investor asks expert which stock he should buy. But he never asks which is the right time to buy. If you enter in right stock at wrong time you will make loss & if you enter in wrong stock at right time, chances are you may make money. If you buy a Good stock after it has gone up a lot, you are bound to incur losses.