Stock markets are the most popular markets for speculation , due to their enormous size, liquidity and their tendency to move in strong trends.

Many investors come with false expectations of the profit potential and lack the discipline required for investing and trading.

On one side of each speculative stock trade is a participant who believes he has superior information and on the other side is another participant who believes his information is superior.

Speculation (a.k.a. gambling), is not investing, and in one form or another has been around forever!

Therefore we eliminate the idea of speculation.

For any amateur or a newcomer, trading in stock market should never be for a short term. He should follow the following golden rules.

Identification of the right stocks based on their past performance, growth and consistency which are undervalued. To exploit your strategy you have to do the research - and keep doing it - including surveying all financial data, online investment resources and company reports.

Deciding over when to buy the identified stocks, how much to buy and at what price.

Deciding over how long, can one hold the purchased stocks?

Making the decision on when to sell the stocks in hand.

We should know our limits when we deal with stocks. It can cash strangulate you.

Identification of your risk limit is very important aspect in stock market. Taking high risks may lead to higher gains. But extreme risk is certainly dangerous.

To execute these, the first and foremost aspect that one should adapt is patience.
Have patience! It's without a doubt one of the golden keys to making money in the stock market. A patient trader has self-control and waits for his analogy to tell him when to enter the market and when to exit. Even if the market appears to have ended its rally, if it does not meet certain criteria the trader had previously set for himself, he must wait.

The best time to buy stocks is the time of "maximum pessimism" - when everyone is selling and fleeing the markets. To do this takes bravery. The method is the mode of reverse psychology. Reverse psychology is doing things opposite from the rest of the market! You want to buy when the average investor is selling and driving the price down. And when good news is driving a stocks price higher, you want to sell your shares at the over inflated price.

Deciding on the price that you want to sell your stocks is one of the toughest decisions that you are going to do in stock trading. Instead of depending on the trend, analysis software or any consultation during the course of time, it is always better to decide on your selling price at the time of purchase itself. That should drive you to take better decisions on selling.