There is so much information out there that claims that is can help you make the huge profits from the stock market. And there are countless investors that readily jump at the chance of these “Getting Rich” only to be burned by the deal, and go home losing their hopes and faith in profitable potentials of stock markets. This is the common tale.
However for the discerning and financially deciphering, there are a few golden rules of stock market to be understood, and if you can start understanding them you will have the opportunity to make the best of the stock market any day, anytime. You will be able to share in the happy tales of the truly successful investors.
The first rule in the grand scheme of investing in the stock market is to have your own rules. Rules that you must have built after carefully studying the general trend of the stock market; rules that will serve well for your own personal purpose; rules that you will strictly adhere to and will not deviate from easily. Inconsistency on your part is indiscipline, and in a business venture like the stock market indiscipline will only mar your chances of making profits.
Do not be fooled that it is only by risking your fortunes that you can make more fortunes. It doesn’t work that way with the stock market, and I doubt if it applies to any other business venture. It is important to always control your risk when trading in stock. First, you are advised to build for yourself a capital base that will serve as a solid foundation for risk taking. Even after building a capital base, you should only allow a risk of about 3% of your portfolio.
In the stock market trade, there are bound to be some losses. Just like any other venture, There is an inherent risk with the stock market. However, if you face such a dilemma, you can always learn from your mistakes and become a better trader. You must be wise enough to have set a target for loss percentage, in which you will let go of that particular trade. Set the target loss to be about 15% of your opt-in. And by this, you will have a safe exit from any trade.
However never make the mistake of disbelieving in an opportunity to make humongous profits from a stock that continues to exponentially rise. Most prudent people make a fatal mistake of seeing this as a stock market fantasy and not stock market reality. However, the stock market is such that inconceivable large amount of profit can be made in a short period of time. So, in a situation that a stock is rising beyond “belief,” you are strongly advised to make the best of the opportunity and just ride it out as long as possible while piling up your fortunes.