10 steps to become a Better Trader

How to Become a Better Trader?

BETTER TRADER

Better Trader: Anyone who wishes to learn how to become a better trader can accomplish that goal if they are willing to get the proper education and put forth the effort to practice and follow directions. While the learning process is different for everyone, depending on their experience and expertise, here are 10 steps that can lead to becoming a better trader.

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New day trader’s expectations and how to manage day trading?

New day trader’s expectations and how he should be managing his day trading?

New day trader’s expectations

If making money while working a completely flexible schedule sounds like the life for you then it is a very good idea to spend some time looking around at the day trading field. With tons of people working for themselves at the hours, they choose to work it can be extremely exciting and rewarding for a lot of people. Learning how day traders actually make their money though can also be very exciting and you are going to have that very opportunity right now.

The best indicator of just how successful a transaction does not always have to be measured in terms of profit though. If you are only looking to make massive amounts of money then you could very well end up being disappointed after your first transaction goes badly. Not all investors are going to find instant success in a bottle with the stock market and day trade is much harder than typical stocks. In order to actually find the results that you want, you need to take some time and carefully review your goals. What do you really intend to pull out of the stock market?

Bad is Good

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What is an IPO scam and how it is done?

Modus Operandi of an IPO SCAM

IPO SCAM

Today, CDSL IPO allotment will be done. I have also applied for listing gains.

Wish me Best of luck!! , Congratulations to all those who got allocated today.

Hopes are dim of getting an allotment because the issue was heavily oversubscribed. Reason being it looks to investors as a legitimate IPO. CDSL IPO is from exchange itself. Central Depository Services (India) Limited (CDSL), a subsidiary of BSE Limited operates as a securities depository in India.

Good IPO’s are not easy to get allotted because of too much demand. D-Mart IPO was another one, which gave heavy returns on the listing. Continue reading “What is an IPO scam and how it is done?”

Advice for new traders

Advice for new traders and What does it take to be a successful trader?

advice for new traders

I started trading in January 2010 with the attitude as most new traders. I believed I could double my capital in no time and gain the financial independence that I was seeking, after all, it’s straightforward right: purchase low sell high, ‘WRONG’. As I was dreaming about my financial freedom my account was dwindling before I knew it. I was down 25%.

Now looking back on those short months, I asked where I went wrong. Because I’ve studied the market, different strategies, the Greeks, when to entry/exit, trading psychology, the importance of a plan, paid advisory services, and read a lot of horror stories about people blowing out their account.

It’s not how much we know that makes us successful, it’s how we apply the knowledge we have that makes us a successful trader.

So what will it take for me to be successful? Well, when reviewing all my trades, my thought process over the previous few months and identifying crucial mistakes.  My plan to flip this business around was straightforward, however, one of the toughest to follow. For me, it’s simply following my set-up. For whatever reason, I haven’t and I was down 25%. (Not saying it would have been different). Why haven’t I followed my plan the procedures I’ve laid out to give my business the best possibility of success? Well, perhaps it’s an absence of confidence, inexperience, the worry of losing, maybe somewhere deep down inside there’s a fear of being successful (now that’s deep) but who knows.

My advice for new traders

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8 Ways To Get Started Right

Get started right in trading

8 Ways To Get Started Right in trading

1) Write down your ‘Why’

Why are you starting your own business? Why are you trading stocks/shares/Forex/options etc.? Do you want to be your own boss? Or you desire more freedom and time to spend with your families? More money? Whatever your WHY, you will need to know what keeps you going when things are not going well for you.
For myself, my WHY is rather simple. I have been leading an average life, and I am not content with it. It is not to say I do not appreciate my lifestyle currently, but rather, I believe that I can shape my destiny through my own actions, and am willing to work towards it.

2) Write down your Goals

Athletes, successful businessman, doctors, lawyers, and great achievers in all fields use goal setting. Statistics show people who write down their goals are 80% more apt to attain them. Short-term goals are simpler to achieve than long-term goals. The reason is, achieving each goal can help you build up momentum to reach your long-term goal. When you do achieve your short-term goals, don’t forget to reward yourself and celebrate.
I have written down my goals down for all to view and possibly laugh at me – to even think I can achieve what I have set. Nevertheless, I will stick to this goal and work towards it.

3) Expand your Knowledge

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Advice for Day trading in India

Few Tips for day trading in India

Before you start day trading in India, Find out is day trading meant for you?

DON’T CHASE STOCKS

Stocks go up because people (usually large numbers of people) are buying the stock. As a trader, this is usually not a good time to also be buying. As such, be very cautious about buying stocks that are rapidly moving away from you. The true money in stocks is made by buying stocks prior to a sudden move, not during a sudden move. The one possible exception to this may be if there is some very positive news that has caught the markets off guard and/or if the news is so outstanding that there is a high probability that the stock may benefit for multiple days. Sudden moves tend to reverse and if you get into the habit of chasing stocks that are moving up, more times than not you’ll end up paying overly high prices and/or getting caught in a downward move shortly thereafter.

Again, generally, people that buy late are buying on pure emotion (greed and fear). Those are the two worst reasons to buy anything – not just stocks. True, you may miss out on the stock, however, in most all cases, it’s better to wait and find another stock, than to pay too much. Patience in the stock market is very important; usually, you’ll do better by avoiding the temptation to “jump” when that impulse is largely a result of a move in the share price alone.

DON’T RUSH INTO ANY TRADE

This is along the lines of the above comment; however, it is worth elaborating on. Often time’s stocks will give you many chances to get into them at current (or sometimes even lower) levels. Generally, there are few cases that require sudden action if you are really careful in how you trade. Sometimes the best trades are ones in which you wait patiently for the stock to come to you. If you feel the need to rush to order a stock, that’s sometimes (not always, but sometimes) a warning sign that you are acting not on a well laid out plan for the trade, but an impulse to “get into a trade” regardless of whether or not the stock is trading at what is really an ideal price.

Keep in mind as well: it’s often not a bad idea to take up positions in a trade little by little. If you plan to own 1000 shares, consider buying 300 shares and then seeing how the stock trades. Often times this will allow you to better judge the market and take advantage of Intraday weakness. If you do happen to miss purchasing the additional shares, there is almost always another trade you can put the cash to work in.

TRYING FOR TOPS AND BOTTOMS

People tend to have a desire to buy at the bottom and sell at the top. Not just near the top, but the “exact” top. It’s simply human nature to want to be the best at something and day trading in India is no different. Most people that take up day trading in India want to be the best they can be. I would much rather give away 10% at the top and 10% at the bottom. You will drive yourself crazy if you punish yourself for not selling at the high or buying at the low, as it’s almost impossible for most people to do on any sort of consistent basis. Far more often than not, you’ll simply end up missing the trade. Even missing a top or bottom by 20% is nothing to worry about. As many a successful trader has said, “You can worry about the tops and bottoms and I’ll worry about the remaining 60%”. In fact, it’s often much safer to wait until a stock clearly signals a move either up or down before taking up your position.

DON’T GET GREEDY

Two of the biggest emotions a trader has to overcome is fear and greed. Many traders fall victim to greed once they see a trade become profitable – simply by not having a firm exit point in mind. It’s generally best to decide on what levels you wish to sell prior to entering into a trade to avoid this. If you feel yourself trying to justify higher levels of the stock and/or ignoring the current profit “as though it were nothing” you probably need to stop and consider not only the value of your profit but the current risk to it by holding longer.

Often times traders who are successful tend to lose respect for the actual value of a dollar. Regardless of how much money you have, you must not lose sight of what each trade produces and the value of the returns in relation to the capital used to produce those gains. An example might be someone with several million dollars. If this person puts $10,000 in a position and saw it produce a gain of $2,000 they might not realize it’s time to take profits. While $2,000 is nothing when compared to several million, a 20% gain should always sound alarm (i.e. Sell) bells in a trader’s head. A common method to help combat this is to look at your trades strictly from a percentage standpoint of view, rather than a dollar standpoint. This allows you to always calculate gains and losses with consideration to the amount of capital at risk for any given trade.

In the movies, “greed is good”, but in day trading in India, it’s generally an emotion that does little more than getting in the way of clear and level headed thinking.

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Advice for traders

Top 8 Practical Advice for traders

Advice for traders

I have tried to compile some Advice for Traders. The post is lengthy but is important to communicate the subject in detail with the traders.

BE CONFIDENT IN YOUR TRADING

Taking up a position in a stock when you are less than 100% confident is just a disaster waiting to happen. Being confident doesn’t mean being right. You can’t always be right. However, based on the facts you have available to you regarding the stock and/or company, you can be 100% confident that you have done your homework based on what information you have available to you. Anything less than this will tend to induce uncertainty into your trading. This will often times undermine your confidence and ultimately your ability to stand firm when others are selling.

By the same token, you must also be confident enough to exit a position when you realize you have made a mistake in a trade. No one is suggesting you hold a stock that is in trouble. Rather, you base your trading on facts, not fluctuations in the markets. Once you have made your decision to buy or sell, if you are right, ultimately the markets will come to you with a profit. Others may sell because they see someone next to them sell, but that is not, and never has been, the road to success on Dalal Street. Don’t follow the crowd – follow your brain, follow the facts. Be confident in your trading and thinking and you will generally (if you are smart and use all the facts at hand) come out on top a large percentage of the time.

HAVE A COMPLETE PLAN BEFORE ENTERING ANY TRADE

This is so critical to successful trading, yet so rarely do I see people do it. Before you ever place a trade, you must – absolutely must – have a plan of action for how you are going to handle the trade. What price you are going to pay, what price you are going to sell at, how many shares you will buy, what price you will cut your losses at, etc. This is critical. You must have a strategy to handle not only the upside but also the downside. The good and the bad about the trade. Where will you sell the stock should it move up and what price will you exit the trade should it move south. How long will you hold the stock if it doesn’t move at all? These are all questions that should be asked and answered before you purchase any stock for a trade. This goes hand in hand with being 100% confident. You must have a plan of attack.

Think of each stock you buy like a battle to be fought on the battlefield. You are the 4 star General of the trade. Do you think a General would direct his troops onto the battlefield without a full plan of attack? Without thinking out every possible scenario or what could go right or wrong? This is exactly how you must approach each trade you make.

Just as important: once you develop a plan, adhere to it. If the stock hits your sell price, sell and move on; if the stock hits your stop, get out. Don’t change your strategies because of your emotions – change only because of additional facts which you did not have when you formulated your plan, or if you clearly identify an error. Never change your plan to try to justify your actions or justify the movement of the stock.

Remember the old saying: the market is always right. To be successful, you need to understand the only mistakes that are made in trading are your own. As soon as you identify a mistake, take action to correct it, not justify it. Continue reading “Advice for traders”

Know your Limitations in trading

know your limitations

KNOW YOUR LIMITATIONS

What did Clint Eastwood say? ” You got to know your limitations” (of course, this goes for a woman as well). You’ve simply got to be realistic about what you are capable of. I hate to say it, but some people are just not cut out for trading. However, self-evaluation can sometimes be very difficult. It kind of falls into the category of “nobody thinks they are a bad driver”. Obviously, if you didn’t think you were able to be successful at day trading, then you probably wouldn’t be reading this page 🙂 However, just because you think you will be successful at trading, doesn’t make it so.

So for those of you that are unsure if you are cut out for it or have difficulty with self-evaluations, here’s my surefire way to determine if you are a good trader: Continue reading “Know your Limitations in trading”

GET YOUR FINANCIAL HOUSE IN ORDER FIRST

Why should you get your Financial House in Order first?

Financial House in Order

Trading and speculation in stocks (more commonly called ‘Day trading’) has been around as long as the stock market has been in existence. Whether it’s the days of the Buttonwood tree on Wall Street, or the Bucket Shops of the 1920’s, or the electronic trading that takes place every day across the Internet, there are and there always will be “traders”.

It’s certainly not difficult to imagine that the first time a person bought a stock and saw it go up, they had the urge to sell and take a quick profit. Day trading is nothing new – it’s simply human nature to want to take a quick profit and then repeat the process.

Some people would like you to believe day trading is something new and that therefore it must somehow be “bad”. However, when you really stop and think about it, day trading is really no more risky than any type of investing or financial speculation. Any investment or trade can go bad, just like any trade or investment can go well. Just talk to anyone that has owned large amounts of real estate for any extended period of time. There have been times in the economy when interest rates skyrocketed and sudden exposure to a large mortgage has been quite risky. No matter what the situation, speculation with any financial instrument brings some amount of risk – especially if done incorrectly or unwisely. Day trading is no different.

Certainly, day trading, like anything else, can be risky if you don’t know what you are doing. I’ve known of people making one silly mistake and getting wiped out overnight. Since day trading does come with a certain amount of risks, it’s only wise to get your financial house in order before you begin. As such, a few basic guidelines are in order. Continue reading “GET YOUR FINANCIAL HOUSE IN ORDER FIRST”