Jakarta, CNBC Indonesia – Stock trading is the activity of buying and selling shares in the short term.
In this case, we will view shares on the Indonesian Stock Exchange (BEI) like goods sold on the market. We buy it at a low price and sell it when the price rises.
Citing an article from Emtrade, stock trading is divided into three types based on the time period and each type has different strategies.
The first is scalping (buying and selling shares in one day or within hours or minutes), swing trading (buying and selling shares in less than one month), and super trading or trend following (buying and selling shares) within one month to one month. year.
So what should beginners prepare as preparation to become a reliable stock trader? Here’s the review.
Understand the purpose of stock trading
If stock investment is aimed at increasing assets and realizing our long-term goals. The goal of stock trading is to increase income every month.
Let’s say, you work as an employee with an income of IDR 5 million. By trading shares, you can get additional income of up to IDR 1 million every month.
You can use the money from stock trading to increase your investment portion in the future, or become more trading capital.
Master technical analysis
Traders will take advantage of short-term stock fluctuations to reap profits. Therefore, it is very important to be able to see how big the supply and demand for a stock is.
Through technical analysis, traders can identify stocks with greater demand than supply. The potential for price increases for these shares is quite high, therefore, traders can take a buy position for these shares.
This analysis can also be used to view historical charts and transaction volume. Charts that have been formed in the past are used to predict and anticipate possible future price movements.
Understand trading risk management
Apart from technical analysis, risk management in trading is also important. Without good risk management, your money could run out due to losses in this trading.
Regarding this, here are the things you must pay attention to.
Stop loss
Stop loss is done to save the capital you have from deeper losses. Ideally, stop loss is planned from the start before you start trading.
You can make rules such as when the price position has penetrated the support limit, then you will place a stop loss, or it could be when your shares fall by 5-10%. This rule is not standard, and you can apply other rules according to your financial condition.
Use cold money
Never use the money you have allocated for short-term needs, such as paying children’s school fees, paying debts, and for other short-term needs.
Funds for short-term needs may decrease when you are forced to cut losses.
Diversification
As with investing, you are also required to diversify when trading. Don’t use one stock or many stocks in the same industry.
Spread your capital across several stocks in different sectors. If you want to buy more than one issuer in the same sector, try to only have a maximum of 2.
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