To become a successful investor, you must always treat your stock investment like a business venture.
1) You should do your own research before investing.
Research the company that you plan to invest by:
a) analysing the stock chart to determine that the stock is on a healthy uptrend
b) analysing its financial statements to determine its profitability
c) and talking to people (such as customers, suppliers or staff) who knows the company.
2) You should research and test your investment strategies before trading.
Your investment plan should include:
a) a price target for profit taking.
b) and a cut loss price to liquidate a bad position.
3) Do not cancel or change your stop loss orders when the market is trading near your cut loss levels.
If you are wrong, cut your losses and get out of the position. Unfortunately, most investors tends to hold on to their losses and take their profits too soon.
4) Do not buy stocks and leave them unattended.
You should keep track of your portfolio on a regular basis.
5) Do not over trade.
Know your risk appetite and trade with your spare cash.
6) Do not listen to market rumours.
Smart investors should look for big blocks of insider buying and selling.
7) Do not invest in a company which you do not understand.
When you are unsure, don’t trade. Guessing will cost you money.