Irrespective of the object of your trading or what size your trading account is, strategies are essential to increase the odds at succeeding in the Indian stock market. Though each one is important, the collective effect can get you started on that success path in trading. We enlist some of those strategies, in no particular order
This plan is a written set of rules that decide the trader’s entry, exit and money management criteria. Technology allows you to test the feasibility of the plan before even you should stick to it. Trading outside of plan is considering as poor trading. Moreover, it reduces the expectation of your plan.
Trading comes with expenses, losses, taxes and uncertainty. Unlike a job, there are no regular payChecks. trading involves stressing a risk. When you treat it like a business, your focus will be on maximizing potential earning grounded on research-based strategies.
As a trader, you need to learn every day. Keep yourself updated on a variety of things that impact the ever-changing market. Understanding the past and current markets by using resources like online trading sites will prepare you to call the shots with much more ease, if not prepare you for the future. Risk only what you can afford to lose trade only if you have enough money after satisfying important obligations like clearing the credits taken on your house or saving for your child’s college fund. You need to be able to wait until you can spare enough to invest and thus expose it to the risk of loss
A “stop loss” is a pre-defined amount of risk that you are willing to accept for any given trade. You could set it as a currency amount or as a percentage of your trade. By enforcing this, you will be minimizing your exposure during trading.
Range trading: Following the spread of high and low prices traded is very useful in indicating entry and exit point for traders. Hence this takes you closer to making accurate calls.
Minimize on brokerage: Holding out investment or long term stock holding comes with the added advantage of even zero brokerage charges at any given time since you do not trade often
Contrarian trading: Here you buy assets that are performing poorly and then sell when they perform well, but have an “underserved ” drop in price.
Despite good intent, unsuccessful trading or poor adherence to planning may happen at times. But it does not mean that it is the end of trading. No matter what strategy you adopt, knowing when and where to stop will help you make necessary changes before continuing. This approach will also help you invest and trade smartly.