These days, Nifty is trading in a range between 4550 and 4650....In fact today, it opened at 4654 (future levels) and then slowly went down to 4536 and then a retracement and again a dip......Many stocks advanced with good volumes while many fell down with Nifty........Though there was no panic as such, yet trading was quite difficult under the circumstances........Then, this is how market behaves, it goes up, up and up and suddenly comes down......People start to panic and when they offload their positions, market again goes up.......
So, the big question is how do you position yourself as a trader? The answer is "you have to become a disciplined trader"......Now whetever I will say are simply lessons learnt from my own little experiences. Though you will find these in many well recognized books and probably you have read it many times, yet it becomes difficult to implement.......Try these once, twice and for a few months and you will find that you have earned much more than you used to.....
1. Always buy at supports or above resistances......When you buy at supports, put a stop loss at the next lower support.
2. Put the stop loss in the system and dont keep it on your mind. Many a times, I find people asking me "stop loss level has come.what to do?"......Never ask such questions.....
3. Do not trade at all times. Trade only when the reward-risk ratio is at 5:1 or above.......You should never lose more than 1% of your trade exposure......Limit your losses, run your profits.
4. Put the targets in the system. Get out when its achieved. "Hope without a reason and Greed for the unknown extra" kills people.
5. Do not overtrade. If your targeted profit for the day is achieved, stop trading.....Similarly, if you lose more than 5% of your trading capital in a day, stop trading for the day.......
Follow these rules and nobody can stop you from appreciating your wealth in a linear or even exponential manner........
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