Rules Of trade in Stocks Markets

Lot of people lose their money in stocks markets because people come with their hard worked money to double the investment but they lose at the end because they did not know how to trade in stocks markets. Today in this article i would tell you the basic rules of trading in stocks markets. So follow these basic steps while trading or picking up a script or stock for investment purpose markets like Pakistan stock exchange (PSX):
(1) Always pick a right stock for trade.A stock which is financial well means company is in profit giving dividends or bonuses on regular basis. Compare company assets liabilities and profits which company earns. Position of company in industrial sector means among competitors. These are the points which should be focused while selecting the stock.
(2) Do not put all cash into stocks invest half of the cash and half cash put in hands so that when market moves down you can buy more stock to average the rate of a security. In fast moving markets like Pakistan stock exchange PSX opportunities are a lot so put cash in hand if you want to take the advantages of those opportunities.
(3) You should always have a plan like what to do if different conditions comes. like at which position i average the stock if goes low or which is the maximum point at which i book profit and at which level i bear maximum losses.
(4) Select right time to enter in the market, for this purpose the strategy should be like buy when market goes down and sell when index moves forward. Some people buy when market or index moves up and sell when index moves down which is a negative strategy and main reason to book heavy losses in financial or stocks markets.
The right time may be you enter or buy stocks when they announce big profits or announce dividends or bonuses.
(5) Go for small loses like if you see the stocks start move downwards then suddenly book losses and not wait for come back or rebound of stock. Some people face huge losses because they wait for rebound of stocks and the rebound comes when they just sell the stocks.
(6) Go for the big profits do not make panic trade or sell in hurry when stocks start moving up or you just come in profit wait for a certain level to book profit and follow the pan you have make.
(7) Select a stock which is more liquid in market so that you can convert securities into cash as per requirement.
(8) Always check stock trading attitude so that you are able to know at which level i can enter and at which level i book the profit for intra day trading.
(9) Avoid the trading during the first 15 minutes of market open because this is a time who set the attitude of market for the day while market goes up or down. Most of the time in first 15 minutes panic traders make the trade.
(10) Always thing about loss first then think about the profit. Those people who have just attitude towards profit lose their money because they just think about the one prospect of the stocks market.
(11) You should most not fall in love with the stocks you buy and must not get angry when the price of stocks falls.
(12) Use stop lose so that you can work smartly in the market this will help you bear small loses. For example if you buy a stock at 500 price and your  stop loss is at 490 then your stock is automatically traded in market when price comes to 490 and you may get a chance to buy again at 475 or 470 level.
(13) Do not give importance to rumors because rumors are created by gamblers who want to achieve their targets.
(14) Always listen the people advice and make your own decision of buying and selling the stock.
(15) If you want to achieve the goals you should need to control your emotions, fear of loss, hope and greed to become millionaire in one night under the control so that you plan give you the best.