Your stock trading methods are your money. When you follow your set methods you make money. These methods are simply rules that you must abide to invest in Indian stocks. However, if you break your own stock trading rules the most likely outcome is that you will lose money. The methods are applicable for all types of stocks, futures trading, derivatives and options.
Once you have a reliable set of stock trading rules it is important to keep them in mind. Here is one proven method that can reap returns. Read these rules before your stock trading day starts and also read the rules when your day ends. Make it self-centric and internalise it for in-depth understanding. Now read it as if you are setting yourself in following each rule diligently.
Method 1: I must follow my rules.
Naturally if you develop a set of rules they are to be followed. It is human nature to want to vary or break rules and it takes discipline to continue to act in accordance with the established rules.
Method 2: I will never risk more than 3% of my total portfolio on any one stock trade.
There is a very old proverb in stock market: There are many old traders. There are many bold traders. But there are never any old bold traders. Protecting your spare money is fundamental to successful stock market trading over time.
Method 3: I will cut my losses at 5% to 15% when I am wrong without question.
Some traders have an even lower tolerance for loss. The key point here is to have set points (stop loss) within the limits of your tolerance for loss. Stay informed about the performance of you stock and stick to your stop loss point.
Method 4: Never set price targets.
This is a style that will allow me to get the most out of rising stocks. Simply let the profits run. Realistically, you can never pick tops. Never feel a stock has risen too high too quickly. Be willing to give back a good percentage of profits in the hope of much bigger profits.
The big money is made from trading the really smart moves that you can make sometime understanding nuances of the Indian share market.
Not jack of all
Method 5: Master one style.
Keep learning and getting better at this one method of trading. Never jump from one trading style to another. Master one style rather than become average at implementing several styles.
Method 6: Let price and volume be my guides.
Never listen to any opinion about the stock market or individual stocks you are considering trading or are already trading. Everything is reflected in the price and volume. Pricing factor is very important in Indian share market.
Method 7: Take all valid signals that show up.
Don’t make excuses. If an entry signal shows up you have no excuse not to take it.
Method 8: Never trade from intra-day data.
There is always stock price variation within the course of any trading day. Relying on this data for momentum trading can lead to some wrong decisions.
Method 9: Take time out.
Successful stock trading isn’t solely about trading. It’s also about emotional strength and physical fitness. Reduce the stress every day by taking time off the laptop or smartphone and working on other areas. A stressful trader will not make it in the long term.
Method 10: Be an above average trader.
In order to succeed in online stock trading, you don’t need to do anything exceptional. You simply need to not do what the average trader does. The average trader is inconsistent and undisciplined. Ask yourself every day, “Did I follow my set methods today?” If your answer is NO then you are in trouble and it’s time to recommit yourself to your stock trading rules. Here, you can download online share buying selling app.