For many, trading the stock market is a gamble. But did you know it can be your ticket to gaining financial freedom? Here’s the magic of technical analysis…
How many of us have invested in stocks at some point of our lives with little or no success? ‘Risky’, ‘gambling’, ‘prone to losses’ – that’s how investing in stocks is generally described as. This is because many novices dabble in the stock market, burn their fingers (and their pockets) and vow never to enter the stock market again – all because they did not learn how to handle their portfolio.
Today, it makes perfect sense to have your finger in the stock market pie, if you want your money to earn for you. The trick is to do it in the right way.
Done in the right manner, you could more than double your returns compared to the traditional fixed deposit or mutual fund investment.
But hold no ill-conceived notions – you will not always makes a profit, and have to be willing to suffer losses. The trick is to restrict your losses and maximise your gains.
According to experts Vishal and Meghana Malkan, whose institute Malkansview has trained thousands of people gain financial freedom, as long as you do not suffer major losses, you can still be in the game for the long term.
You can use something called ‘stop loss’ with each trade to make sure you do not lose more than one percent of your total investment capital every time you buy a stock. This means that if you buy a stock which is priced Rs 100, you need to place a stop loss of say Rs 95 – in case the price comes down to Rs 95 after you have bought it, it will get sold automatically at Rs 95, thus restricting your loss to Rs 5.
This small loss is often referred to as ‘happy loss’ by experts – because it stops you from making a huge loss. The exit with a small loss, frees up your capital and enables you to do your next promising and carefully researched trade. Using the right strategy you can increase the probability of making large profits, since your downside is already restricted with the stop loss strategy.
The upside, of course, depends on how much the stock rises. Selection of the right stocks is the key here. Using methods such as technical analysis, you can select stocks which show signs of moving up sharply. Institutes like Malkansview simplify technical analysis so that even a novice can trade using their techniques to select the right stock at the right time.
The next trick is to know when to buy a stock and when to exit. If one follows technical analysis again, there are certain triggers which help you enter the stock at the right time, and exit at the right time.
For example, Vishal advocates using a simple strategy – RSI and moving averages are two indicators to ascertain the right time to enter a stock, and when to exit. He recommends two strategies – one for wealth creation (long term investing), and one for income generation (short term investing). So even while you are building up your long term portfolio, you are assured of a monthly income which will help you become financially independent.
“In fact, today, anyone can learn to navigate the stock market with a little help and the right guidance from experts,” says Meghana who has co-authored the book #Cashtags which teaches that anybody can trade. “Unfortunately, few seek this guidance, and instead prefer to depend on ‘tips’ and ‘gut feeling’, rather than invest some time in learning how to trade. Many of them have lost money in the stock market because of lack of adequate knowledge, confidence and the right strategy. While some do manage to be successful, they are unable to do it consistently.”
Too many traders get caught up in complex trading methods and excess information. The most important skill is to control one’s emotions during volatile times. If you plan to invest in the stock market, attend courses which guide you on the right strategies before you take the plunge.
Malkansview, one of India’s largest organisers of seminars on stock trading and investing, is organising Stock Trading Simplified seminar on December 7.
Where: Param Banquets, Amber Arcade, Majiwada Village Rd, Sainath Nagar, Majiwada, Thane -400601
When: December 7 from 10 am to 1 pm.
Event registration is free.
For more details, call 9821618517 or visit www.malkanseminar.com