Alphabot

So, you’ve just entered the stock market for automated trading and you’re feeling a little overwhelmed by the sheer amount of data being bombarded onto your brain? Are you finding it difficult to chart out a way that would help you navigate the murky waters of the ever-changing stock market? Fear not, because we’re about to share some of the best tips that would help ease your transition into the stock market.

Soak knowledge like a sponge
Besides learning about different algo trading strategies, you also need to constantly update yourself with the market conditions. Your buying and selling decisions would only be as accurate as your understanding of the market.

Don’t go all in
Make a calculation about how much of your capital should you be willing to risk per trade. Many traders who’ve achieved success in the stock market tend to risk only 1% to 2% of their account per trade. The more you’re willing to risk, the more you should be ready to lose. Even the most experienced traders can never predict the market with complete certainty and therefore, you should invest carefully.

Climb the ladder carefully
You may be tempted to jump at every opportunity that you see as a beginner, but Alphabot remember to keep your focus on only one or two stocks during a particular session. When you’re dealing with a limited number of stocks, it is much easier to track and discover opportunities.
Don’t trade during the opening and closing hours

The stock markets are pretty volatile during the opening hours because the orders that were placed by traders and investors on the previous day begin to execute as soon as the markets open. It might be possible for an experienced stock trader to cherry-pick stocks that might deliver profit but amateurs must avoid trading during the first 15 to 20 minutes. Instead, you should observe the patterns and study the market during that time.

Use limit orders
Make a decision regarding the type of orders you’ll use for entering and exiting trades. You basically have two options; either you use the market orders or the limit orders. If you place a market order, it will be executed at the best price available at that time, which means that there is no price guarantee. On the other hand, if you use the limit order, you get the price guarantee but not the execution guarantee. Thus, limit order helps you trade with much more precision. You can set your own price for buying and selling.

Think about generating realistic profits
Don’t fall victim to the stock market stories of doubling or tripling your money within a month or two. First lesson that you need to learn is that you don’t necessarily have to win every trade to accrue profit, and truth be told, it is impossible to win every trade. Good traders only win 50% to 605 of their trades. The trick however, is that they earn more on their wins than they lose on their defeats. Always make sure that you are only risking a small percentage of your account towards a particular trade and that you have well-defined entry and exit points in place.

Don’t panic
The stock market is a pretty volatile place and things take shape and get ruined within a matter of seconds. The best way to make profit in such a situation is to keep your emotions – fear, greed, anger, hope – at bay. Your decisions should solely be made based on logic and reasoning and not an emotional impulse.