There is a famous saying that goes, “Catch them young” Which means that good habits are inculcated at a very young age and last long.
That’s why trading and investing is a kind of habit that teaches you self-discipline and the power of taking the small calculated.
Trading at a young age comes with some groundbreaking benefits like securing your future goals and teaching you proper risk management.
So, if you are interested in trading stocks in your college days, This guide will walk you through the five best trading tips that you can ever encounter.
Let’s do this!
But First, Why do you even want to get into investing?
This may seem like a simple question, but trust me it’s not!
Trading is probably the best thing that you can do to accumulate a big chunk of money, especially if you are in college. Additionally, trading in a highly stable market like Nifty 50 share price can significantly reduce your losses.
It teaches you self-discipline, and patience and also helps you understand the subtleties of trading, because in the end,
“The goal of a successful trader is to make the best trade. Money is secondary!”
— Alexander Elder (A professional trader)
Investing offers you the potential for higher returns and work on your future from a very young age. It also enables you to be independent and not rely on others for current and future endeavors.
So, why not go for a trade?
Now, Let’s Go Through the 5 Best Trading Tips
Trading is the process of buying and selling financial assets such as stocks, bonds, currencies, etc. to extract a good profit. This often involves analyzing the market trends and a proper understanding of the short-term trading approach.
Here, take a look at the best trading tips for you:
Extend Your Knowledge Horizon
They say knowledge is power, which is true to some great extent when it comes to trading.
Trading is not everyone’s cup of cake, it requires a deep understanding of the stock market trends. Where you need to be updated with the latest market news and events and the Federal Reserve System’s interest rate plans
Trading also demands an understanding of the minor indicators that may affect the whole market. One clear indicator for that is to analyze the Nifty 50 and bank nifty market share, which lists down the top growth stocks, reflecting the Indian economy.
So, the tip here is to do your research before going for a trade, scan their business news, and bookmark along with their past performance.
Risk only what you can afford
So, if you have finally decided to risk a trade, set aside funds.
What I mean by that is, don’t risk all of your accumulated capital, just start small and risk just 1 or 2% of your income.
This will cut your losses and help you understand the subtleties of the market with just a small risk capital.
Do You Know?
95% of the people start trading with the illusion of a “get rich quick” strategy.
Go With the Plan
Probably one of the best trading strategies is to go with the plan.
What most successful traders do is they move fast and make quick decisions, and that is what maximizes their profits.
But how do they actually think this fast?
Well, because they have already developed a trading strategy and have a strong discipline to stick with it.
A trading plan involves a set of rules that specifies the actual entry and exit from the market with a particular profit goal in mind.
So, the key here is to create and stick to the plan because taking a trade out of the actual plan is considered to be a poor strategy, even if you turn out to be a winner.
Always Use Limit or Target Orders
Losing money is already traumatic enough, this is why it is always advised to cut your losses by implementing a perfect stop-loss strategy.
A stop loss is a predetermined exit price or loss that a trader is willing to risk. This automatically executes the order if the price hits the stop loss.
Similarly, Implanting a target order is considered a best practice, where it fixes your profit margin by automatically executing the trade.
The idea that this strategy presents is to exit the trade with a good profit in hand and ensure that the losses and risks are limited.
Be Realistic About Your Profits
If you are thinking of entering a market by just looking at the other’s profit, I would highly suggest you not enter at all.
Trading is not a one-way road, and it is obvious that if someone is making money out of it, someone is also losing it.
And, even the most successful traders can make the perfect profit in 60% of the trade, So make sure that your financial risk is limited with each order and try existing in the market as soon as you hit the profit in your mind.
Conclusion
Trading is risky, but it can also be highly beneficial for college students, who want to be independent and secure their future goals.
Trading teaches you emotional balance, self-discipline, and the power of taking small calculative risks. The trick here is to keep your losses small enough so that you can keep trading until you catch the bigger fish.
