Millennials are driving an interest towards trading and investment in share market. It is getting more popular amongst young millennials. Although before investing in the market one needs to have knowledge and brief idea about how things work in the market. Market is a very complex structure. A complex structure can be simplified by knowledge and a set of process. Here are some points which can help to start a trading journey.
1. Learn One strategy
Investment strategies help investors to decide where and how to invest according to their expected returns, risk appetite, long-term, short-term holdings, retirement age, choice if industry, etc. Investors can learn and formulate their investment plans as per the objective and goals they want to accomplish. Some types of strategies are Passive and Active, Growth Investment, Value Investment, Income Investment, Dividend Growth Investment, etc. One can learn any of these strategies as a beginner to kick start their trading journey.
2. Develop a
is more of convincing yourself before investing any amount. Self-confirmation
is a trigger to start your trading journey with assurity and confidence to earn
profit on applied strategy.
Every strategy comes
along with risks and uncertainties. Risk plays a huge role in every investment
because no investor would like to take unnecessary risk and sink in losses.
Some types of risk-taking investors are High risk-taking, Moderate risk-taking,
and Low risk-taking investors. Risk management means taking minimum risk and
cultivating profits, or taking calculated risks in order to avoid huge losses.
Once the investor knows to manage the risk, it becomes easier to a step closer
to their desired trade and profit. One
can choose whether to take High risks, moderate risks or operate on Low risks.
It is very
essential to know the rules before starting to trade in the market. Writing
down rules to trade will help the investor to have a smooth trading experience.
Abiding by the rules and regulations is indispensable to sustain in the market.
5. Back test
In evaluating the
feasibility of a trading strategy, traders use Back testing. Back testing
reconstructs transactions using historical data instead of using real-time data
for the simulations, as traders would use for paper trading. It''''s to see
whether in the past a strategy would have succeeded or not. The entire aim of
the test is for traders to understand how their trading risks can be reduced
and work to increase profits. If done correctly, positive back testing results
can demonstrate that a certain strategy might succeed in the future that will
give you more faith in a specific trading model. But if the outcomes are not
positive, you can either tweak the strategy or just eliminate it.
The investor can
make changes to the rules or the formulated strategies according to the changes
in market. Even if a particular share is fundamentally great there are chances
that it can change its nature according to the markets flow. Modifying rules is
essential according to the market trends.
7. Back test
The investor has
to back test again once the investor makes any modifications to the rules. This
will help investors to cope up with the market fluctuations and keep their
trading with small capital
The Investor can
start to trade with small capital once he/she is confident enough and has known
every possible thing to operate in the market. Trading with small capital will
help the investor to gain first-hand experience of live trading and will boost
confidence which eventually will help for future trading activities.
Trading with huge capital
Once the investor
has done well with small capital investments, he/she can look up towards
investing large capital in the market and analysing the trade.
Start your trading journey, beginners trading, Trading strategies,
Self-confirmation system, Risk management, Rules, Back testing, Small capital,
Large capital, Share market.