10 Stock Trading Tips That Every Investor Should Master

Wanting to learn how to invest in stocks effectively is not just about theory. The market always requires you to stay constantly updated, learn from those who came before, and most importantly, practice continuously. Here are 10 tips that successful traders all apply.

1. Clearly Define Your Playing Style From the Start

First, you need to decide whether to trade short-term or long-term, as these approaches are completely different.

Short-term trading: Buying and selling within the day, based on technical analysis, continuously monitoring news. High profit but also high risk.

Long-term investing: Buying and holding good stocks for many years, analyzing the company’s business situation. Stable returns, lower risk.

Once you’ve chosen your direction, you’ll know which strategies and tools to learn. Don’t fluctuate between the two, as it will distract you. Stick to your plan to avoid poor decisions driven by emotions.

2. Never Put All Eggs in One Basket

This is the golden rule of investing that Warren Buffett often mentions. Diversifying your portfolio means buying many stocks from different sectors, or even diversifying into cryptocurrencies, forex, commodities.

For example, indices like S&P 500 or VN30 are already diversified portfolios. When a bear market hits, these indices tend to decline less than holding a single stock.

This approach has advantages: higher yields than bank deposits, lower risk than holding a single stock. Disadvantages: in a bull market, profits may not be as high as catching good stocks.

3. Stock Selection Skills Are the Key to Success

If you are a long-term investor, choosing the right stocks is very important. Read financial reports carefully, understand the company’s development plans.

Signs of good stocks:

• Low debt, liquidity ratio from 1.5 or higher
• Revenue and profit increase continuously over the last 5 years (excluding force majeure periods like COVID)
• Profitability indicators such as profit margin, ROE, ROA increase annually
• Regular dividends
• Reputable leadership, no scandals

Looking at the top Vietnamese companies that have appreciated strongly over the past 10 years like Vicostone, Vingroup, Vinamilk, Hòa Phát… they are all large enterprises with high market share, trusted by workers and the market.

4. Adjust Your Portfolio According to Market Fluctuations

The world changes, people’s needs change, and the stock market must also adapt. Even long-term investors need to periodically review and adjust their allocations.

For example: When COVID-19 broke out, central banks loosened monetary policy, interest rates fell. Borrowing became cheap, leading to a surge in real estate demand, which boosted real estate stocks. But later, when tightening policies were implemented, demand decreased, and real estate stocks reversed downward.

Warren Buffett is a long-term investor, but if you follow Berkshire’s portfolio, you’ll see stock weights are constantly changing. Success is not about holding for a long time, but holding with the right proportion at the right time.

5. Risk Management Is the Top Priority

Short-term trading has high risks, so controlling risk is crucial. Use orders like Stop Loss (stop-loss order) or Buy Stop (buy stop order) to protect assets.

Best way: set stop points at 10-15% from the opening price. That way, even if you lose, it remains within your tolerance.

This rule helps you avoid heavy losses when the market suddenly reverses.

6. Use Technical Analysis to Find Optimal Entry and Exit Points

Experienced traders use technical analysis: charts, patterns, indicators to determine the best timing.

Two most popular indicators:

• RSI (Relative Strength Index): RSI < 30 = stock is oversold (buying opportunity). RSI > 70 = approaching overbought (be cautious)
• Stochastic: Above 80 = overbought (ready to decline). Below 20 = oversold (ready to rise)

If you’re not familiar with these indicators, start with simpler signals and gradually improve your skills.

7. Catching the Bottom of Stocks - A High-Profit but Extremely Risky Strategy

Bottom fishing can generate extraordinary profits but also easily lead to “catching falling knives.”

Signs of a stock bottoming out:

• Price makes a new low but indicators like RSI, Stochastic rise → selling momentum weakens
• Price starts making higher lows → selling pressure diminishes
• Trading volume spikes during decline → investors are bottom fishing

Note: Only invest small amounts to catch the bottom, avoid risking all your assets. Stay away from speculative stocks or those trading below par value, as they tend to fall deeper.

8. Do Not Borrow Money to Invest

This is a common mistake. Do not borrow money to invest in stocks. Use only idle cash or savings that, if lost, won’t affect you.

You can use margin (leverage) to increase profits, but must understand the risks. For example, with 1:20 leverage, $100 your control over $2,000 worth of stocks$100 . Worst case, you only lose your initial capital and don’t incur debt. Best case, a 1% increase in stocks yields 20% profit.

Carefully weigh the pros and cons of margin before using.

9. Continuous Practice Is Warren Buffett’s Secret

Buffett always emphasizes: never lose money when investing. To do this, you must keep learning, analyze stocks thoroughly, and practice trading.

The best way is to start with a demo account (free trial account), trading with virtual money to accumulate experience without risking real money. Once confident, switch to a real account with a small amount.

10. Stable Mindset Is the Secret Weapon

Markets have crazy days. A position with big gains today can turn into heavy losses tomorrow. Keep your psychological stability, analyze the real reasons to decide whether to hold or cut losses, not driven by panic or fear.

Don’t cut losses impulsively due to emotions—you may regret it later. Also, avoid holding on too long just because of a mindset of constantly switching.

In summary: Learning to invest in stocks requires patience, discipline, and a strong mindset. The tips above are not shortcuts to wealth but foundational principles to build sustainable wealth in the stock market.