Published : 13 years ago, on 30/03/2012

Investments are the best way towards building a better future. Investments are done in various forms. Investors are broadly classified into 2 categories- High-risk takers, and low-risk takers.
If you are a high-end risk taker, you can choose from stocks, bonds, Forex etc. Any type of investment is done with an ulterior motive of minting money for future savings.
There are a few trading tips one needs to keep in mind before investing:

1. Know your investment plan: When you know what you are buying you are also subjected to know the risks involved in that stock. Thus, knowing your product allows you to play calculated risks.
2. Setting price limits: When you want to buy or sell a stock/ security at a specified price, you need to place a limit order rather than the prevalent market order. This allows you to avoid buying or selling or stocks at a price higher or lower than the one you want.
3. Right research: Experts have always opined that a thorough market research, and also research on different companies stocks, their history can contribute to a more defined approach towards investing. And an investor can reap better results if he has a better understanding into his product.
4. Chart reading: Financial markets display their stock behaviour in the form of chart readings. Reading charts can prove to be beneficial for investors to trade effectively.
5. Choosing the right shares: Make sure you do not buy a share which shows a declining trend assuming that it will show improvement in the future.
6. Choosing the right agent: A stock broker is a person who is specifically assigned the job of reading the market behaviour, understanding the stocks pattern. Therefore it is advisable to select the right broker for a better management of your stocks. It is also advisable to pick a discount broker rather than a full service broker.
7. Setting exit points: While dealing with stocks, you can make profits only when you sell your stocks at the right time. Therefore it is crucial for you to decide on the right exit points to achieve the desired profits.
8. Technical analysis: While indulging into the stock market you can first try doing a technical analysis in order to examine the history of security’s trading pattern and if the external factors like the economic, fundamental or news events impact the trading pattern.
9. While buying a stock don’t make emotional decisions.
10. Follow the market trend: It is found that people decide to move with the market flow, so when a particular stock is going up, it is noticed by more people and then buy that stock for assured returns.