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Principles of Stock Trading In order to profit

Navigasi - The principle of stock trading is very important for those who really want to buy and sell actively. Therefore those who want to trade must understand some of these principles.

Principles of Stock Trading In order to profit
Principles of Stock Trading In order to profit

Indeed, we often carry out buying and selling activities for months, even years, but sometimes if there is passion, we also occasionally trade on a weekly basis. So what we explain is more based on experience.

Consequences of Active Stock Trading

What is meant by stock trading is the active activity of buying and selling shares in the short term. It can be daily, weekly, or even hour and minute.

Each type of trading contains several consequences that participants in the capital market need to be aware of. Especially the psychological, mental consequences of a person. Because trading has a high level of stress. Simply put, you will think over and over again.

The faster the trading time is done, the greater the mental pressure will be. Trading patterns with hourly duration, greater pressure than daily. Then you understand this consequence.

Therefore, even though there are so many traders in the capital market, not all are successful. Only a few are able to do and money. Others are more involved. So it is necessary to re-understand the principles of stock trading.

Principles of Stock Trading

If you already know the consequences, and are very ready for stock trading. Then there are several principles that need to be understood in trading in the capital market.

The first principle of stock trading, it's called buying and selling, so you have to take active buying and selling actions. Be active here despite loss or gain. The most important thing is active. If after buying the price goes down, and you love to cut losses, that's already an investment.

The second trading principle is that every actor or so-called trader must have a plan for what to buy and what to sell. Don't blindly have no data, there must be preparation. The preparation is usually in the form of analysis. Be it technical analysis, fundamental or even bandarmology. Everything is well prepared. Even pro traders, usually spend a special time at night for the next day.

The third and very important thing is to determine the target buy. This means that if you don't reach that price, don't force yourself to buy, if you do, everything will be destroyed. Traders must have these targets. I give an example,

ShareTarget Buy
ABCD $ 10
RAMI $ 16 
INFO$ 12

The principle of stock trading then is to have a selling target. Now this selling target can sell profit which is called take profit, you can also sell at a loss which is called cut loss. Selling at a loss was carried out for fear of experiencing deeper losses. Examples of targets in the table,

ShareTake Profit Cut Loss
ABCD $ 12$ 9
OSDC $ 7$ 4
NAVI $ 10$ 7
INFO $ 15$ 10
SIGER $ 25$ 19

Now, what is called profit in trading is not all that makes a profit, but the activities in those one or two days, when added up between profit and loss, produce more profit. I made an example to make it easier,

Shareprofit and loss Buy
ABCD $ 200
OSDC-$ 100
RAMI $ 200
NAVI-$ 100
INFO$ 300
SIGER$ 500
Total$ 1000

That's how to calculate the profit ratio. If all the stocks we trade are one hundred percent profitable, in our opinion things are close to impossible. But if the stocks that we trade are accumulatively profitable, that has a point.

The next principle of stock trading is to consider the administrative costs of each transaction. Remember, you have to bear the administrative, tax and other burdens that are usually borne by traders.

Now each broker has a different amount of fees. Not the same. Some are expensive, some are cheap. Now you have to calculate all these costs. So that you know exactly how much load you have to spend.

when buying and selling, one share is just about 0.5% already calculated with stamp duty. The bigger the transaction, the smaller the stamp duty expense for buying and selling shares. Because it remains one material.

This means that if you calculate the profit above the difference is $ 1000, then you have to deduct 0.5% of the total price. For example, the result of this percentage is $ 50, then the net profit is $ 950 in a day.

Here's an overview of some of the principles of stock trading that you need to prepare carefully. Do not let you think that you have made a profit, but it turns out that your balance is decreasing every day because you don't know how to calculate in the world of stock trading. Good luck and can lead you like Japanese trader Takashi Kotegawa who managed to multiply money in just a short time.