Stock markets attract traders to speculate on their capital. There are several instances where traders throw money into the stock market without understanding why trends are moving higher or lower. Enthusiastic traders enter a trade to make profits. But it is important to trade with patience and with logic to avoid losses. It is important for Traders to have strategies but there are some traits that need to be avoided to safeguard investments. In this article, we have listed some of them. But before that, let us discuss how to start share trading and what is a Demat account and trading account. 

A Demat account is an account that holds the financial securities in electronic form that you buy in the stock market. A trading account helps you place buy and sell orders in the share market.

How to start share trading

• Start your trading journey with a fair understanding of the financial markets
• Open a Demat and Trading Account with SEBI registered stockbrokers only
• Learn to analyze financial market patterns
• Determine your risk profile
• Make a plan and follow it rigorously
• Practice trading through paper trading or dummy trading terminals, then go live 

5 Things Traders should avoid

Following are the five traits that traders should avoid: 

• Avoid investing Too Much Capital:

It is not true that high investment will lead to greater profits. It is preferable to invest a small amount of your capital in the beginning. Invest only the amount that may not perturb you in case you lose it fully. 

• Don’t Plunge with limited knowledge

Share Market gives plenty of opportunities to create wealth in short term and long term. One can generate capital in a much shorter duration by tapping the opportunities in the share market. However, taking a plunge at once without any experience might lead to losses and discourage an investor. It is better to practice on dummy trading platforms that mimic the real stock market but you actually trade in through virtual currency. 

• Avoid Models You Don’t Understand:

Do not invest in companies and business models that you do not understand. If you are trading in individual stocks, you need to understand each company before investing. If it is not in your interest, simply avoid it. Otherwise, it will be hard to understand the trading patterns based on the ups and downs of stocks, and eventually, you will bear unwanted losses.

• Stay Focused on Strategies:

Maintain a trading decorum and focus on strategies instead of getting swayed by the herd or emotional reasons. Strategies are prepared based on market trends and success rates. You can test your strategy before using it in live trading. Try to be master a single strategy first instead of trying different strategies.

• Avoid Sticking with one Company:

Often, traders stick to one company in which they have invested when it performs quite good and offer good returns. But remember that you have spent your hard-earned money to buy its stock. If at any point in time, you find that the fundamentals in the company have changed and you should sell the stocks, go for it. Check about the basics of the company again, if required. The company has so many investors, you are not the only responsible investor for it. 

The Bottom Line 

You must understand that entering the stock market is very easy, but sustaining is tough, and it is the toughest to sustain without losing your invested capital. The best way is to learn how to trade in the stock market and be skilled. Trades should be well-planned and performed with the discipline to stay in the marathon with minimum losses.

There are several factors to keep in mind at the time of choosing an online trading account. Brokerage is one of these factors and active traders feel concerned about it. High brokerages may eat up all your profits. With a discount broker, buying and selling brokerage is reasonable since they charge a flat fee per order. The savings is much more compared to full-service brokers. With discount brokers, you get the scope to trade more frequently. On the other hand, brokerage charges of full-service brokers are linked to trade volumes and so it entails high brokerage costs.

There are some credible stockbrokers offering trade at much lower brokerages through their annual subscription packs. Traders can trade in intraday and delivery at price as low as Rs. 1/order and in Futures and options at price as low as Rs. 5/order through its Professional subscription pack. 

Their account opening is 100% digital and can be completed in less than 10 minutes. All you need are soft copies of PAN Card, Aadhar Card, Photo, Cheque and signature. You can esign the application using Aadhar esign.