Guide on How to Maximise Stock Market Returns

In this article, we will discuss

How to Maximise Stock Market Returns

Maximize Your Returns in the Stock Market Trading

Stock market returns of every trader differ based on the approach they take in the market. While there is no right or wrong approach, every trader needs to formulate strategies that work for them. Unlike common belief, stock trading isn't just betting your money on a stock and then taking advantage of the momentum. It consists of several other skills apart from just having a large risk appetite. Skills such as technical trading analysis, studying the markets, analyzing individual financial goals, etc are all virtues of a good trader. Here in this article, we have covered all the basics of stock market trading. A trader can use them to maximize their returns with the right guidance.

What is Stock Trading?

For the unversed, stock trading means the frequent buying and selling of financial instruments. Such instruments include stocks, commodities, currency pairs, metals etc. The goal is to beat the index returns, ride the momentum and make profits in a specified span. To make profits, traders usually buy securities at a lower price and sell them at a higher price. Another approach to making profits is known as short selling. Herein, traders first sell at a higher price and then make profits by buying that same stock again at a lower price. Different types of trading include day trading, scalping, swinging, momentum trading, position trading, F&O trading, etc., which have been discussed further.

Different Types of Trading in the Indian Stock Market

Before you delve straight into buying and selling securities in the market, it is important to know the different types of trades you can leverage to make profits. Different trading types require different strategies and are meant to fulfil different financial goals. In order to maximise their stock market returns, it is crucial for you to also understand the different types of trades. Every activity of this type of trade is limited to one single trading session. All the buying and selling of stock takes place on the same day. A trader has the official working hours of the market, i.e. 9:15 am to 3:30 pm, to execute their trade, including both buying and selling. Day traders try to capitalise on the small movements of a stock's NAV value. However, day traders need to be well-versed in trading technical analysis, market volatility and reading market graphs. Owing to the technicalities involved, this form of trading is best suited to more seasoned traders.
  • Swing trading

Another way to generate stock market returns is swing trading. Traders use this to capitalise on market trends that may last from one to seven days. These short trends help traders analyse market patterns and execute trades accordingly to capitalise on them. These are micro-trades that last for just a few minutes. A trader may execute almost up to a hundred short trades a day to reap small profits. This is a subset of intraday trading, and a trader might not always end up with profits. For such quick trade execution and squaring off, traders need to be thorough. They require a firm grip on trading technical analysis, be aware of the markets and have skills to identify trends. It is a long form of trading and is likely one of the most secure ways of trading. Traders executing such trades hold onto their position for a while before realising any profit. However, unlike other trading types, a delivery trader cannot use margin to make the trades, and they need to pay the entire value of their purchase up front. Another subset of this is position trading, which is more suitable for beginners. They are comparatively safer and help them generate better stock market returns.
  • Momentum trading

A stock will either have an upward or a downward momentum. This trading style is all about identifying such trends and capitalising on them. Traders make profits by trading on trends that have broken out or are likely to break out soon. If a trend is gaining upward momentum, traders sell the underlying stock to make an above-average profit. Similarly, if the trend is downwards, they buy the stock at a lower price and sell it when it gains momentum.

Tips for Traders to Generate Better Stock Market Returns 

Stock trading isn't simply just buying and selling securities to make money. It is a complex net of strategies, and traders who don't tread carefully can easily get stuck in it. Here are some basic tips and guidelines you can adhere to in order to maximise your returns.
  • Start with a small capital

If you have recently started out, it is important to start small. Investing small sums of money will help you get the hang of the markets while also allowing you to understand how you can generate stock market returns. Trading with small sums in the market also allows you to analyse your emotions and understand your trading style, needs and end goals.
  • Start with backtesting and paper testing

Even if a particular strategy has been used by hundreds of traders in the market, it is very crucial for you to test it when using it for the first time. This process of backtesting gives you a chance to understand how the trading strategy works, study its historical data, and then make an informed decision. Paper trading lets investors practice trading without using real money. Even though it doesn't involve any other charges levied in live trading, you will get the opportunity to learn the art of trading in an almost real market with real pressure and volatility.
  • Track trading performance

You can use an investment performance app for a detailed report of how your investments have been performing in the market over a period. Imagine this as a report card that tells you if you have been performing well in the market or not. It gives you a real picture of the returns so that you can plan your next move accordingly.
  • Use stop loss

If you add a stop loss to your trade, the stock brokerage platform will immediately sell off your position once your stock triggers a set price. Setting stop loss prevents traders from incurring very high losses in case they can’t manually sell off their stock or get persuaded by their emotions to wait just a little longer.
  • Analyse your trading style

As already discussed, it is vital for a trader to understand their trading style. Different traders have different approaches and styles of trading. There are tools available in the market that help you identify your trading style and then build your trade strategies accordingly. Traders who know their style would be able to conduct more focused research, narrow down their market studies and gradually improve their stock market returns.
  • Do not blindly follow the herd

While it would help to follow the experts and learn from their trading style, it doesn't mean you should start following everyone blindly. Remember that not every person who trades is an expert, and not every expert's strategy aligns with your goals and needs. Therefore, irrespective of who you take advice from, you must always do your own research. Even if you follow financial experts, you must make sure that their advice aligns with your financial goals, monetary capacity and risk appetite.
  • Compare your performance with peers and experts

A healthy competitive environment helps a person learn not just from their own mistakes, but also from others'. By using such tools that allow you to compare your portfolio with others, you can know the possible mistakes that you should avoid. It also helps you figure out if you could have done something in your own trade differently. Traders can easily use Samco’s peer comparison tracker and star fund managers for the same.
  • Learn to leverage technology

There are several tools that you can use to make trading technical analysis way more easy. These tools help new traders easily read graphs, understand market trends, identify patterns and also gain insights into the market. To be able to generate better stock market returns, it's crucial for you to leverage technology in today’s digital age.

How Can Samco Help You? 

With the mission of helping every stock market participant ace the index and get market-beating returns, the New-Gen Samco app is elevating the trading experience for everybody. You can now create your own personal index, get personalized feeds, compare trading styles and index performance with other traders, etc., on just one app! With features that allow comparison of one’s own trades with peers, you can get a deeper insight into your performance. It’s a first-in-India, investment performance app that is focused on helping traders maximise their returns.


To generate stock market returns through trading, several factors come into play. While we have discussed the technical aspects, it is also important for you to be rational. It prevents you from letting your emotions cloud your judgement. Even though the idea of making quick money is enticing, performing some due diligence would take you a long way. So what are you waiting for? Join Samco today and start your stock market journey with confidence. Click here to open your free Demat account with Samco now.

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