Stock market is of highly volatile nature and keeps on fluctuating, it is really difficult to predict its movements. By studying market technically and fundamentally to certain extent it can be predicted in the right direction. One reason because of which traders avoid to trade here is because of frequent market fluctuations. To sustain in market on long term basis it is necessary to have good knowledge of market terminologies and all recent updates. Also services like mcx tips , trading tips and more can be refereed to manage risk and returns in a better way.

Traders fails to earn profitable for themselves while trading in stock market because they lack in sufficient skills to manage risk in an optimum manner. Some risk management techniques using which traders can earn well from market are discussed below:

1) Plan you trades in advance

To become a successful trader you should always plan your trade in advance. Mostly those who starts trading blindly without having any plan are the ones who fails to earn good returns for themselves. Understand the present market conditions then decide which trading strategy is going help you with good returns.Avoid using strategy which you do not understand completely.

2) Choose diversified sectors

Maintaining a well diversified portfolio helps in managing risk as well. While picking up stocks try to pick stocks belonging to different sectors like IT, pharmaceutical, telecommunication and more. Also along with stocks you can have some commodities as well as a part of your portfolio. This will help in diversifying the risk of overall portfolio.Under-performance of one sector will be compensated by out-performance of another sector by doing so and you can avoid earning negative returns from the market.

3) Follow the market trend

Following the market trend is advantageous in most cases. Traders who are having good trading experience and market knowledge may prefer to trade against the market trend if they have some good reason to do so. Beginners or those who do not have much knowledge about market should always follow the market trend to be on safer side.

4) Stop loss orders

Using precise levels of stop loss helps to control your losses from market. Learn how much risk you can bear then select your stop loss. You can directly place stop loss orders with your broker. Your position in stock market will be automatically squared off if price falls below that level or rise above that level.

While trading in stock market risk can not be eliminated or ignore but yes to certain extent it can be managed. Financial advisory services provider are also there who give useful suggestions to traders after carefully understanding market conditions. You can follow these trading tips also to manage risk and improve your earning from market. Have a good understanding of your risk bearing capability and trade accordingly.

Author's Bio: 

I am a financial analyst and like to read and explore more about market.