How to earn money with stock market betting

The Secret Of Making Money By Stock Market Betting

Most long-term participants on the stock markets get to view the markets as a measure of the state of the overall economy. When the economic activity produces the desired social and economic gains, then generally the markets would reflect this by having profitable trades being conducted. However, a factor in trading on the stock markets is that this is essentially a zero-sum game. What that means in more simple terms is that if someone were to make some money by stock market betting, then it would necessarily say that another has lost the same sum of money either individually or collectively.

Understanding the risky part of stock market betting

Any trade initiated on the stock exchanges does carry a definite risk to it. So there is no such thing as a sure shot trade at any time. The key to making money is to understand the risks involved in each trade and to try to match the promised return with the risk that the deal would carry. This would mean that every individual needs to approach the markets according to his own personal situation and never try to push through blanket assumptions and conjectures.
The most successful bets placed on the stock markets are by those who have made it a habit of calling correctly and consistently too. Losses are inevitable, and the degree of success is measured by the least amount of losses that are suffered by the market participant.  

Understanding What Goes by the Long Trades And Short Trades

The long trades are those where the person gets to buy security to take advantage of a higher price later on and to sell out at a higher rate than the purchase cost. Another manner of making money is by going short on a security. This is essentially selling an instrument before buying it later on to take advantage of the potential fall in prices.
Conventionally, the first group of market participants is referred to as the bulls and the second category, the bears. All markets are essentially battles between the bulls and bears. So who so ever gets to call right gets to make money most of the time. 

Modern-Day Complex Derivatives 

Derivatives are financial instruments that get their value from an underlying security or device. What makes the use of derivatives is the leverage that it would offer the participant. So it becomes possible to multiply the earning as compared to the more traditional securities.
In the case of the equity shares and even things like commodities, it is more or less clear to the investor or speculator the kind of risk that he is being exposed to on each trade. But the derivatives are some of the most complex instruments that it is hard to get a proper measure of the actual risk that the investor gets to be exposed to. If someone were to conduct an appropriate study on how the fair value of a derivative instrument is calculated, it will reveal the enormous dark spaces that exist in the very existence of the products. 

How To Make Money by Playing the Markets

  • Understand risks well: If a person is getting to put the money on a particular instrument, then it is best to know the kind and amount of threat that he is exposing himself. If at any point, the stock market betting appears riskier than the comfort level of the trader, the safe step would be to pull out of the deal. It does not have to be that every day has to be a tradable day and it is the wise person who sits out an uncomfortable situation than lose money. 
  • Keeping the stop loss:- The term stop loss is a fascinating one. It sets the amount of money the investor can afford to lose without hurting his spending power. The more experienced traders would admit that often it is the stop loss levels that more or less makes or breaks a trade. What this means is that the stop loss should not be fixed but should vary with the risk-taking ability of the trader as well as the return that the person wants from a trade.
  • Calling it quits: Historically it would be observed that people who knew when to stop playing the markets would have been the most successful ones too. However, of all the qualities, it is when to call it quits to a trading position that is probably the most important one. If this art can be mastered, then the trader can indeed look to a fruitful association on the stock exchanges and online gambling in India.


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