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Your Online Guide » Guide to the Stock Market » Investing and Trading

How To Be A Stock-star:
by Micheal James, Mic
To be a star performer in share market, you need to be a fine all-rounder. One has to be an expert in theories of the trade, and versatile in their applications. Performance of a share depends on many factors. Important ones among them are quality of the company, and macroeconomic environment, general market conditions etc. A good investing decision demands multi-dimensional considerations. The aspiring star must have the thorough knowledge of fundamental and technical analysis, and how they influence the price of a share singly and jointly. Investing is an art full of risks. The important quality that separates the winners from losers is the knowledge in investing, which is the outcome of the acquired wisdom gained through past experience, and expertise gained out of the mistakes committed.

Some of the rules of investments that have all-time importance for a starry performance in the share market are:

It is perfectly fine to have high-pitched ambition to make quick gains through the share market. But if you are a beginner, never invest more than 25% of your total budget and if everything goes according to your plans, gradually increase the limit to 50%.

The golden rule--never stake your entire budget in one stock, even if you are convinced about the rosy picture for the company. Invest in several companies and in different sectors.

Be watchful and vigilant about the market conditions. See whether your portfolio is suffering a temporary setback or the bear market conditions are about to begin. In such an eventuality be mentally prepared to sell most of the holdings to avert major losses.

Never rush with your trade decision and do not connect the issues which are not actually related to the share market. Solutions implemented in a hurry will, in all probability, end up in losses. Be a regular student of the financial quarterly reports of the shares in your portfolio, share analysis and research news and macroeconomics trends before taking the final decision.

Emotions have nothing to do with the hard realities of investment. Stay away from it and approach the trade in a disciplined manner.

Any stock, howsoever perfect may be your fundamental analysis and research, can go wrong suddenly and begin to depreciate. In USA the recent researches have shown that more than half of the investors use the services of broker and financial consultants for their trades and portfolios. A stock star must not be guided by any of the following negative traits related to trading. They are: impatience, greed, fear, over-confidence, not caring about the timings for investments, not setting up stop-loss limits, entertaining delusions that have no relevance to the share market etc.

In share trade, theory and practical, both are like the two arms of the scale. Both are equally important. You need to remain the permanent student in this area and constantly upgrade your investment skills. Try to be an expert of fundamental analysis and interpretation of technical analysis indicators. With your study coupled with the expertise of the broker, the losses will be minimal. Read the quarterly financial reports of the companies that you have included in your portfolio, watch the overall market conditions carefully.

Mr. Pat Dorsey, Director of Stock Analysis for Morningstar, Inc. advises that a successful investor needs to learn:
?How to develop a feel for what makes a company profitable
How to find great companies with a competitive advantage
How to make sure a company's management team is on their side
How to recognize red flags that can cause blow-ups in a portfolio
How to apply proven valuation principles to improve results?

Success in trades depends on personal discipline, whether the mass of investors is in agreement with you or not. After the careful scrutiny, be not afraid to take your own decision, because you are a stock star now.
Micheal James has sinced written about articles on various topics from Investing and Trading, Fitness and Stock. SogoTrade stock broker:Trading Packages at SogoTrade:
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