1. Always do a thorough research before buying any stock. Go through its last few days, one month, six months, one year and three years chart and closely watch the stock's price during those periods. Also go through company's financial details like balance sheet, profit and loss, quarterly results and yearly result, growth pattern, year to year and quarter to quarter growth details, Price-Earning Ratio (P/E), Return on Equity (ROE), Earning per Share (EPS) etc

2. Don't by shares by just reading someone's tips. Even if you are planning to go with tips then follow tips only from well established share brokers.


3. Don't put all your money in one stock or in one sector. Select one good stock in each sector and diversify your investments. BSE and NSE have different sectors like Information Technology, Oil and Gas, Power, Telecom, Media, Healthcare, Textile, Housing, Tourism, FMCG, Automobile etc. Find out sectors with visible growth and select one or two good stocks in that sector for your investment.

4. Don't buy in Bulk quantities. Share price fluctuates in every second. So if you put all your money at once then you will not be able to buy more when it goes down. So buy in small quantities in each dips. For example if you are planning to buy 100 shares of Tata Motors and its current price is 750 then purchase 20 shares when it goes down to 740. Purchase another 20 when it touches 730. Like that buy in small amount for each dips. If you buy all 100 shares at 740 then what will you do if it goes down to 700?

5. Do day trading only if you know share market well and ready to take any risk. Day trading is very risky. Some times you will be able to make good money with day trading but same way you will loose money also.

6. Read share broker's terms and conditions and price structure carefully. You should be thorough with their fees and charges. Different brokers have different price structure. For example my share broker charges .5% for buying and selling a share. But for selling they have a minimum fee of Rs 16. So even if I sell one share they will charge me Rs 16 as brokerage fee for that sale. Apart from their basic brokerage charges there are many fees and taxes like service tax, security transaction tax, education cess, stamp duty etc.


7. When you stock appreciates more than 12.5% then book partial profits.

8. If your share price goes below 16% of purchase value then it is better to sell the it to save your principle but you can hold on to it if the company profile is very good and you are very sure about the stock's future.

9. Some people believe that they will be able to make good money in buying cheap stocks. But high value stocks have good earning potential and will appreciate faster than cheap stocks.

10. Regularly visit stock related web sites, watch news channels and read expert advice on different stocks and overall market conditions.