A lot of people these days have been considering trading and investing as a lucrative career. In fact with the rise of indexes globally and new age millionaires on rise, people feel that trading can help them make fortunes. Unfortunately, there is a lot of fog on this subject as seldom people talk about their losses or project how bad is the condition of their capital accounts. Usually under these circumstances, a lot of charlatans are turning into coaching gurus and are fooling around people. Hence, this post will help novices to understand how to trade like a pro.
- Don’t buy less liquid stocks
If a stock has very low volume and low price too, a lot of people jump in considering it to be a bargain hunting. One needs to avoid trading such scripts. - Set the target on terminal not in mind
Its necessary for the people to set targets manually as and when market begins. Often it happens that the stock moves so swiftly that you fail to put in target and miss the golden opportunity. - Choose the right broker
It’s important to understand that the right broker plays an important role as choosing the wrong one can cost you huge due to the hidden costs. As a result brokerages might eat up a massive chunk of your profits. - Have your own trading setup
its important to device your own trading setup and not depending on an existing one. If you choose an existing one,make sure you backtest it properly. - Never put all eggs in the same basket
As the legendary investor Warren Buffet says, one needs to diversify to make sure one gets consistent gains. Don’t put all your investments in the same basket. - Nurture Discipline
Discipline is the key to succeed in any endeavor as so in trading too. One needs to have patience, skills and strategy all in place in order to succeed in this market. - Choose your guide wisely
As mentioned initially, a lot of charlatans have occupied the space and hence it is of paramount interest for the people to choose their advisors wisely. One mistake can cost you fortunes. It’s better if you check their past performances. - Entry in haste, regret in later
You need to understand that entries are equally important while trading. If a stock is just moving in your direction and you feel you have missed the train, then it is better that you wait for the entry rather than jumping in. - Keep tight Stop Losses
One reason why so many loose money in stock markets is because they don’t keep stop losses. They simply wait for the things to turn in their favor and as a result they loose a lot. - Don’t rely on medias
Medias are here to make some good bucks by selling information. Most of it is already known to big investors and is factored in. Hence, it’s not wise to lend all ears to the media and burn your hard earned money. - Consistency is the key
I have often told my clients that it’s not about hitting home runs on each ball, it’s more about taking few runs but being consistent. Consistency is the mother of mastery. - Don’t gamble on result days
A lot of people have observed wild swings during quarter results which entices them to jump in with a trade. This is a big mistake. If results or the move is not in your favor, it can wipe off your account. - Don’t overtrade
Some people get addicted to trading to such an extent that they can’t think of anything else. Avoid getting trapped into this kind of addiction. - Don’t take massive leverage
No doubt, leverage is the key which has helped millions of traders in making millions but it has killed accounts of billions too and this fact can not be denied. Take leverage only when you are an expert. - Start loving small losses
Coming with a wired expectation that you would always gain in the game of trading is a foolish idea. Even the best traders of the world know how to accept looses. The earlier you accept that you were wrong and cut looses, the longer you will survive. - Monitor your trades regularly
A block deal or sudden geo political news can ruin your trading account and hence it is importance to keep a regular track of your trading account. - Check your trade books once atleast in a week
How did you perform for the whole week? If you know the answer to this question, you can device new strategies, cut down looses, introspect and make the next week more productive.Keep a record. - Positivity loop
Success breeds success and which in turn breeds confidence. You need to identify your winning trades and also keep yourself positive most of the time. Trading is one of the most stressful jobs and hence you need to try every bit to remain positive. - Know your personality
If you are an adrenaline junkie, then day trading sounds well for you but, if you miss that lion heart, then you need to reconsider and probably stick to swing trading or positional one. It’s important to identify your trading style before you jump into the business of trading. - Stick to plan
Seldom it happens that novices stick to the plan. They device a strategy and then keep on fluctuating with the markets dynamics. Yes, markets are changing shape like amoeba but that shouldn’t be an excuse for you to over diversify your plans. Stick to plans and remain consistent. - Organic gains will help not bigger deposit
If some one looses the account value, the most common thing they do is put in some more money in the account. The obvious question is, what gives you the right to trade with more money if you fail to make money from the existing capital? Try to make small gains, build an account and then try trading with larger amount of funds. - Learn technicals like a pro
If you need to master trades, you need to have mastery in technical analysis. Which brings us to the next point- - Read a lot
Reading about technical analysis will give you the biggest edge in the markets. The more you know how to decrepit charts, the language of candles and price action, the more you will have chances of making money through markets. - Taking a pause when you are loosing
It happens with pros too. No one is profitable every day of the year. It’s just that winners halt for a while when they are loosing continuously while scared looser keep trading until their account becomes zero. - Don’t play event days
Central bank’s monitory policy or Presidential elections, name any such grand event when market hasn’t witnessed any volatility. Markets are bound to witness volatility on such occasions and hence it’s better not to trade on these days. - Averaging is good but over averaging is a debacle
You pick a stock which falls suddenly. You average. It falls yet again and you keep on averaging until a point arrives when you cant average anymore. Result- Account collapses. Hence, as long as you don’t master the art of trading, it is better to book loss on stop loss rather than averaging. - Stop trying to copy someone
When you see some ace investors, you feel like copying their portfolio. This isin’t a wise idea because their capital, information extent and strategy differs. It’s better to have your own strategy. - Don’t do what you don’t understand
If you are unsure of what you are doing and still standing with a position, congrats you have found the shortest route to doom. It’s better not to trade when you don’t know why are you trading. - Diversify only to the extent of monitoring
Over diversification is also not conducive for trading ambiance. If you are not able to keep a track or focus on your trades, diversification would do more harm than good. - Control your emotions
As long as you can control your emotions while trading, you are the one who controls the system. The moment emotions take control, the markets take over and can be ruthless. - Automate Automate and a little more automation
As told in the previous point, emotions can be one big setback while you are trading. Hence, it is better if you can automate the whole process. I am not suggesting you to buy expensive softwares but just to keep some pointers ready on unpredicted situations like sudden crash in market or news related to your stock. - Use this ratio – 3:1
Risk reward ration ensures that you make more than what you loose. As per my experience, 3 :1 forms the best risk reward ratio. It is hence, advisable to keep this ratio intact to be more profitable. - Don’t be so skeptical while hitting ‘BUY’ order
If the trade is qualifying all your criteria, then why not hit the ‘ BUY ‘ button. Some times you miss the train because you become over cautious. - Don’t make it complex
Using 2-4 indicators while judging whether to enter a trade or not is fine, but juggling along multiple indicators with as high as 10-20 is a big mistake. This could ruin your chances of entering. Keep the methodology simple. - Don’t trade with borrowed money
Only trade with the money that you ca afford to loose. One should understand that trading comes up with associated risks and there is nothing called guarantee here. So, if one intends to make stress free decent gains, never trade with borrowed money. - Learn from your experience
As said- ‘Experience’ is the best teacher. Most of the things which you would learn about trading would come through experience and not through reading only. So, try to learn from your mistakes and then rectify them. - Trend is the friend
Going against the trade seldom makes money but,going with the trend mostly fetches you gold. Make trend your friend and don’t go against it as long as you have a huge pile of cash which you can afford to burn. - Money management is vital
If you trade well but still fail to manage your gains and money well, then there is a serious issue. In order to be successful, you need to manage your money well. Try to allocate right amount of funds, look for all right possibilities and only then prefer trading. - Fundamentals are also important
I know most traders would argue that for trading, it’s just technicals which play an important role, but we need to understand that fundamentals play a key role in identifying the right stocks. If you do a bit of nice fundamental analysis, you will be in a position to identify the right stocks to trade with. - Treat it like a serious business
Don’t approach trading as a hobby. If you don’t take all the areas with proper commitment like the brokerage, tax, buying and selling, then you may not be able to get serious gains. - Keep on educating yourself through financial news too
A lot of financial news medias bring about information on a lot of topics like PE ratios, current industrial developments and investor education. Keep hunting for the same. - Take advantage of technology
Technology should be used at the best in identifying stocks using the best indicators, charts and offer+bid analysis. - Getting a mentor helps you win half the battle
If you fortunately get one experienced mentor who also traded his own account, then you are bound to learn the art of trading early. Its better to have a committed mentor than going for courses which just give a basic overview.Practicing under a mentor is an old edge method of learning. - Survival of the capital is the main quest
Just imagine, your account going burst and you helplessly trying to recover. Not possible,right?Hence, preserving the capital is the most important aspect of the trading business. Use stop losses, use booking target, close trading while http://loosing.In short, use every thing required to protect your capital. - Sizing is important
If you made loss in 100 shares and now are expecting to hit jackpot with 1000 shares, I will say,its pure foolishness. Earn the right of trading a big account by making gains from small amount first. It’s very important to keep a check on the lots with which you trade. - Some times learn not to trade
Whatever style you pick, there will be circumstances when you would fail to find a perfect strategy to trade with. Under such situations, it is better to avoid trading rather than trading. No trade is also a trade. - You learn quicker when real money is involved
A lot of traders start their career with paper trading which is absolutely fine but when you stick to it to research all strategies then it’s a bad plan. It is important to understand that real money gets real emotions involved and so its more effective as compared to paper trading. - Select a niche and segment, stick to it
Everyone is not made for equities. If you are finding it hard to crack the secret of equities then better switch segment- currency or commodities. Master a niche and stick to it. - Have realistic expectations
If you plan of making unrealistic gains like 15-20 % in a day, then you are likely to get stuck and eventually burn out cash. It is better to have realistic expectations when you start trading. - Take a break
Sitting constantly infront of your laptop for trading will put undue stress on your eyes as well as brain. This stress might result in some tension which can hinder your profitable trades. Take a break occasionally. - Don’t Give UP
Finally make sure that you don’t give up on loosing. Keep learning and devising your own strategy. Failure is the ladder to success and hence if you fail, get up, learn and then grow.
So, these were 51 tips which if followed rigorously can turn you into a rock star traders.
For More Details Visit : www.wealthmaxsolution.com Or Call Us At-+91 9285292851
For More Details Visit : www.wealthmaxsolution.com Or Call Us At-+91 9285292851
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