How to generate consistent income from the stock market
In the last couple of years, the Indian stock market has seen a huge surge of retail traders. While this number keeps growing month-on-month, the actual money earners are not growing. As they say making consistent money in stock market is a skill which can be learned.
Every single day, there are way more people who lose money in the market than those who earn.
Nithin Kamath from Zerodha, in one of his recent tweets said, “I’m surprised that, so many are surprised that just 1% of active traders make more than bank fixed deposits over 3 years timeframe. Active trading is like running a business, only a small % succeed. The only easy bit about trading is starting trading.”
“We can’t agree more on this fact that only easy thing about trading is to start trading ”
– Adwizon, (India’s first real-time stock market advisory platform)
While there can be numerous reasons for a trade to fail, there are a few common mistakes that most traders fall prey to, thus resulting into losses. Through this blog, we wish to highlight the most probable reasons of losses and how Adwizon (India’s first real-time stock market advisory platform) helps you overcome these hurdles by becoming your trusted stock market buddy and thus helping you in making consistent money in stock market.
Let’s look at top 5 reasons for losses:
- Trading on Tips:
Most of the traders trade based on some tips, from a friend, a trustworthy acquaintance, off-hand information from a TV source or from a social media channel like Telegram and WhatsApp. The trader fails to see the logic of the trade, if there is any, why this trade is recommended and what risk he will be taking by opting for this trade. e.g., for someone with a trade position of Rs 2 lakhs, the risk of Rs 5,000 might be nominal but for someone with a trade position of Rs 30,000, the same risk of Rs 5,000 is huge.
- Trading without a stop loss:
Entering a trade without a stop loss is another sin which a trader commits. As you take a trade, you should always be aware, how much you stand to lose, if the trade goes against you.
- Magical Expectations:
Owing to speculations created by some unauthorized channels, the trader begins to have magical expectations from a trade. Just because a stock recently rose 15% doesn’t guarantee another 15% move in a short span of time. This results in many traders not booking profits at the right time only to see the stock price go downhill.
- Buying the falling knives:
Another important reason in this list is “Averaging Out”. Most of the traders try to average out their buying price when the stock price is falling. It is extremely important to know the critical support levels of a stock, otherwise you end up accumulating a stock on dips, which continues to fall. If a stock has gone down 20% it does not mean that it will now start to rise. If the odds are against you, it might go down another 20% or more depending on the reason for its fall.
- Trading without understanding the overall market direction:
We often buy stocks without knowing the overall market direction. If the market direction is expected to be downward, it is better to sit on cash rather than watching your trade go down (if you are long on a trade). The overall market direction helps understand the stock trend and thus trade more sensibly.
So now that we know the common mistakes a trader does, how can we learn from it. Trading is a continuous learning process and we should be always open to learn and use the smart ways to cut down on our losses. If we learn to manage our risk, half the battle is won. Making consistent money in stock market is a skill, you can master over time.
This is precisely how we at Adwizon are helping a retail trader. By being a trustworthy stock market buddy, we hand hold a trader in these uncertain times and insulate him from any major losses. Let’s look at how you stand to gain from India’s first stock market advisory app, Adwizon:
- Connect to professional research analysts:
- Now, connect to professional analysts and get the authentic trading levels. No more trading based on tips. Trade based on actual levels and know where is the support and resistance for the stocks you want to trade in.
- Connect in real-time:
- Most of the times, a trader is stuck in a trade and doesn’t know when to book profits or cut down losses. With Adwizon, you are connected to professional research analysts in real-time. Every time you are confused about a trade, all you have to do is “AskNow” and you get the research report in your Adwizon inbox within 5- 7 minutes.
- Get the daily market stance:
- Traders also end up losing money by going against the market trend. Now you can create your trade positions, by knowing the experts’ view on the market. With Adwizon, get daily trading direction for Nifty & Bank Nifty and trade with better conviction.
- Get access to free research reports:
- Our professional research analysts publish weekly reports on most searched stocks and share their research reports. With Adwizon, get access to these reports for free and decide which trade position to build on.
- Get the trading levels on your stocks before market opens:
- If you have started doing your own research, Adwizon helps you to trade with more clarity. Now, ask about the stocks of your choice to the analysts and get the trading levels before the market opens the next trading day.
Like they say, “Only the disciplined ones are free in life”. Sticking to this discipline will help you make your trading journey more fruitful and less stressful.