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Point To Be Kept in Mind While Doing Trading

The document provides advice for day traders, including that they should expect losses and not believe claims of easy profits. Day trading is a stressful job that requires heavy borrowing and depends on short-term price movements. Traders are advised to use technical analysis to identify trends and support/resistance levels, set stop losses to limit losses, and trade with discipline rather than emotions. Successful trading requires a plan, managing risk, and gaining experience over time.

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Ashish Singh
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135 views15 pages

Point To Be Kept in Mind While Doing Trading

The document provides advice for day traders, including that they should expect losses and not believe claims of easy profits. Day trading is a stressful job that requires heavy borrowing and depends on short-term price movements. Traders are advised to use technical analysis to identify trends and support/resistance levels, set stop losses to limit losses, and trade with discipline rather than emotions. Successful trading requires a plan, managing risk, and gaining experience over time.

Uploaded by

Ashish Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Point to be kept in mind

while doing Trading


Importance points for Traders
• Be prepared to suffer severe financial losses.

• Day traders do not “invest”.

• Day trading is an extremely stressful and expensive full-time job.

• Day traders depend heavily on borrowing money or buying


stocks on margin.

• Don't believe claims of easy profits.

• Watch out for "hot tips" and "expert advice" from newsletters
and websites catering to day traders.

• Expert Trader.
Secret formula?
Q: How do I detect the start and end of a bull trend?
A: The Elliot holds the key.

Q: What supporting evidence can I use to confirm the above


signals?
A: Start by Reading the Market.

Q: What about using volume to confirm breakouts?


A: Volume Patterns shows you how.

Q: How do I select stocks that are outperforming the market?


A: Market Leaders explains the basics.

Q: How do I lock in profits on individual stocks?


A: Use Stop Losses to protect your gains.
Importance points for Traders
Expect the unexpected:
unexpected Investing involves dealing with
probabilities – not certainties. No one can predict the market
correctly every time. ‘Avoid gamblers’ logic.
Do not Average in the losing direction.
If you increase your position when price goes against you, you
are liable to compound your losses. When price starts to move it
is likely to continue in that direction. Rather increase your
exposure when the market proves you right and moves in your
favor.
•Limit your losses.
•Use stop-losses
•Mistake you can make is to hold on to falling stocks
•Control your emotions
•Understanding yourself
Want to trade successfully?
Just choose the good positions and avoid the bad ones.
Many short-term players view trading as a form of gambling.
Technical Analysis teaches traders to execute positions based
on numbers, time and volume.
Markets echo similar patterns over and over again: The
science of trend allows you to build systematic rules to play
these repeating formations and avoid the chase:
•Forget the news, remember the chart.
•Buy at support, sell at resistance.
•Short rallies not selloffs.
•Don't chase momentum if you can't find the exit.
•Trends test the point of last support/resistance.
•Trade with the TICK not against it.
Golden Rule for Traders
• The trend is your friend in the last hour

• Bulls live above the 200 day, bears live below.

• Price has memory.

• Big volume kills moves.

• Trends never turn on a dime.

• Beat the crowd in and out the door.

• Don't trust others opinions.

• Don't believe in a company.


Golden Rule for Traders

• Don't break your rules.

• Don't forget your discipline.

• Don't chase the crowd.

• Don't ignore the warning signs.

• Don't ignore your intuition.

• Don't hate losing.

• Don't think its entertainment.


Golden Rule for Traders
• Don't trade over your head - If your last name isn't Buffett or
Jhunjhunwala, don't trade like them. Concentrate on playing the
game well, and don't worry about making money.

• Don't seek the Holy Grail - There is no secret trading formula,


other than solid risk management. So stop looking for it.

• Don't count your chickens - Profits aren't booked until the


trade is closed. The market gives and the market takes
away with great fury.

• Don't forget the plan - Remember the reasons you took


the trade in the first place, and don't get blinded by
volatility.
Golden Rule for Traders
• Don't join a group - Trading is not a team sport. Avoid
acting on messages, flashes and financial TV. Your
judgment may be more correct than all of them put
together.
• Don't think its entertainment - Trading should be boring
most of the time, just like the real job you have right
now.
• Don't try to get even - Trading is never a game of catch-
up. Every position must stand on its merits. Take your
loss with composure, and take the next trade with
absolute discipline.
Unsuccessful vs Successful trader

 Don’t have trading plan  Effective trading plan


 Don’t back test  back test do paper trade
 Over trade  Limited trades
 Margin calls  In pocket trades
 Don’t understand risk
 Don’t get margin calls
(risk management)
wait till 3:20
 Don’t control on their
 Understand risk, limit
emotions
amt for particular trade
 Control on their
emotions.
 6. lack of knowledge
 7 . Lack of experience.
THANK YOU

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