Stock market trading is replete with pitfalls. If you are not careful, you can lose your hard earned money. But if you invest carefully, you can become a millionaire over a period of time. There is no doubt that you can take to stock trading to make money. Your first priority should be to make sure that you do not lose it. There are certain steps that you should take in this direction.

Use Stop Losses

No body can make absolute predictions about the future trends of stock market. Uncertainty is a basic feature of stock market trading. It is, therefore, essential to use ?stop loss? order every time you make a trade, otherwise, you are likely to lose all your investment.

Don't jump across a speeding train

Most people believe that you should buy low and sell high. This is considered the essence of leveraging the stock market arbitrage system. Most people, therefore, eagerly buy stocks which are plummeting downwards. They do so in the fond hope that as soon as they buy the falling stock, it will turn around and start rising up. But making money in stock market is not such an easy mathematical formula. The stock investment experts know that stocks which fall precipitously tend to keep falling. Stocks with strong fundamentals do neither rise nor fall like meteors. They rise gradually and resist downward pulls. Buying steeply falling stocks is like jumping across the speeding train. Invest in stocks that are healthy and keep moving up gradually. You should not think in terms of simplistic formula of ?buy low and sell high? but ?buy high and sell higher?.

Ignore the TV Pundits

There is no dearth of stock market pundits who love to flaunt their knowledge in hyperbolic terms while recommending the stocks on TV. If their predictions were so accurate, every body would become millionaire by following them. This is not to suggest that you should not listen to the experts through the media. The problem arises that by the time you listen to their advice and implement it, it becomes too late. They are professionals who spend time researching the next great stock to buy. But by the time the stock pick is recommended to the general public on TV, the smart traders have already invested in it. When you try to invest in the same stock, its price has already risen.

Do your own homework

There is an axiom that says that you cannot reach heaven unless you die. So the best course is to do your home work and think independently. Your stock broker provides you numerous research tools that allow you to scan the market opportunities.

Learn to view and analyze the historic stock charts. You may use ETF screening tools. Some stock brokers provide hypothetical portfolio that allows you to view historical performance and historical charts.

Read the news flashes that constantly appear on your stockbroker's website. Study the periodic reports, orders, graphs, future plans and other details about the company whose stock you intend to invest in.

Over time you will evolve your own intuition about the right picks for buying and selling. You will remain ahead of the curve and be among the first to take advantage of the buy and sell opportunities.

Do not overpay commissions

If you calculate brokerage on just one-time trade in a stock, it may not appear too high as compared with the amount of your investment. You may even ignore the high commission if you are a one time or a long time investor. But you cannot afford to ignore the rates of brokerage if you are a day trader or even a frequent trader. Remember, it is the pennies that make pounds.

Let us assume you start trading online with one thousand dollars. You pay, say, ten dollars per trade. If you make, say, thirty trades a month, you end up paying three hundred dollars just in brokerage. You can do the math for your annual trade commissions. If you overpay the commissions, you are likely to be doomed regardless of how good your stocks picks are. If you plan to invest over long time, you must find out a broker who charges low commissions on your trades. There are brokers who charge extremely low commission. They even do not charge you any maintenance or inactivity fees, if your account becomes inactive due to any reason.