Five important Tips Trading

Sometimes people have a loss in the stock market. Someone has a small loss, someone has a big loss. Well, I don't want you to have a big loss at any time. And for that, I am going to give you five golden rules of trading. You must constantly keep them in mind if you trade.

I am going to teach you these Five rules and in fact, there will be many people who will have more experience than me and they will also tell you should abide by these guidelines because doing so will greatly reduce your risk of losing money and increase your chances of making it.

The First Rule

You should never trade against the trend. Avoid trading against the trend if you must. Now you know that the trend is up here, you know that there is a downtrend, you know that there is a sideways trend. Example for, Let's assume that a down trend is going on. You are aware that while the trend is active, you will observe something similar. The price of the stock goes up, goes down, goes up, goes down and ultimately a trend line follows. So now when you see the trend going down, you are logged in to your Demat account and have set your indicators. Now you see a signal like this, you see a candle, which you think will move from here.

The stock's decline is now limited to this point. Now the breakout can happen from here. The trend can reverse from here. It may not have happened. You have traded and you have traded against the trend. I am telling you, this is my own experience. I don't do this at all now. If the trend is in that direction, then you have to trade in that direction because the trend is your friend and if you trade against the trend, you will have a loss. Therefore, in the beginning, I made a few trades that were against the trend, and the results were usually losses.

Trend, I think you should follow this rule. In today's date, I consider the trend my friend and that is why profit-making becomes easy. You have to understand that stock went down, then you saw it coming up a little bit, there was a candle or you saw an indicator that there was when there is a crossing in MSED and something happens, the minor details that are noticeable there might be appropriate for you, but not until the trend reversal is apparent on the chart, we will not trade.

The Second Rule

Although my advice may come across as harsh, always trade inside the limit. Every person has different limitations. You see someone's profit on Instagram, Facebook, and YouTube, you see a profit of 20 lakhs, you see a profit of 5 lakhs, you see a profit of 2 lakhs, I have to do it too. You have to do it in one day. Now, to make a profit of 2 lakhs in one day, a person was trading in 20 lots, but your limit was to trade in 2 lots, what did you do? You took on extra debt or other people took out loans, so you slightly depleted your savings. 

You are going out of your limit and you are going out of your limit, you could have traded in 2 lots, you traded in 20 lots. I will say it very clearly, you may make a profit, but you are going to lose all this money because you will not be mentally stable at all. When our limit is, it is possible that I can afford a loss of 2 lakhs for me, it is possible that you cannot afford it, it is possible that even though I cannot afford a loss of 20 lakhs, someone else can. So everyone has different limitations. It is very important to identify your limitations here. If someone were to assume that you, the loss of 2000 would not cause you much difficulty or emotional distress.

You can bear the loss of 2000, You have to trade according to that. It is not that you saw someone trading, he was trading in 50 lots, I will also do it. I have invested all the money, and a lot of money will come. I have no idea whether that money will materialize, but I do know that if you exceed your limit, you will suffer a significant loss that you will be unable to bear, and at that point, you will be trading. There are options traders, who trade in options. There are intraday traders, their life is very short because the day they have a big loss, they join hands that the stock market is gambling, I will never come. You made gambling.

The intention with which you went towards leverage was your intention that I become a millionaire in a day, I become a millionaire overnight. This does not happen. This is a game of discipline. You must realize that in the stock market, success depends on maintaining discipline. Money is made from discipline. You must exercise patience when trading.

The Third Rule

Which tells you never to be in a hurry to trade. What do people do in a hurry? When they have time, let's suppose they are in the office and have time to trade for a half-hour or an hour. It indicates that they now have to trade for a half-hour. You can see something, you can't see anything, you can see something while trading. You are not seeing anything. You simply open the stock, examine the line chart, and the candlestick, and take note of what is being produced. Now you trade according to what you feel.

You notice a candlestick pattern, you observe the price movement, you notice, for example, that the stock has broken the resistance, and you notice it. In addition, an indicator, such as the RSI, MACD, or moving averages, is also letting you know something. After observing all of this, if you trade patiently while receiving many confirmations, you will make money. But if you only trade on feeling, you will trade in a hurry, and you have to trade in an hour, what is important to you can check your accuracy by doing it, trading after an hour, and then trading on paper.

Until you get multiple confirmations here, with patience, you can see that the market is open for you from 9.30 to 3:15 trading. It is sufficient to make 3 to 4 good deals during the day; you do not need to make 20 trades, but you must take your time for 3 to 4 trades. 9.15 market doesn't need to be open, I will still take the trade, not required, there is no hurry. If you go here in a rush, you will leave in a rush, and if you trade patiently, you will profit patiently. What you must do is entirely up to you.

The Fourth Rule

This is very important that you will never average on the losing side. Now what happens, is people take trades this is for investors too. You have invested in a stock, you started investing when the share price was 100 rupees, now it is 70 rupees, and now you have a loss, you bought another share that was formerly worth 100 rupees and is now worth 150 rupees.

Do you know what people do, they sell these 150 and book a profit. You have booked a profit and here where you see that the share of 100 rupees is 70, you will say I will buy more, I will buy more, the average will arrive at 85, which it has now, and when they see that the price has breached, it will have become 60 rupees. Okay, let's buy again, let's average it, now let's see, it has become 40 rupees and I can give you many such examples. It's not true that what I'm saying to you is based on my personal experience; after all, mistakes are committed by everyone. these mistakes and mistakes are made, so mistakes are learned. The price we were looking at was the share, the share that was running, we sell it, so our running horse, we sold it and our lazy horse, we are telling the horse that was going to win the race that you would win the race while we are feeding it chickpeas. We sold the horse that was going to win the race.

This does not happen. Ultimately, the company's share is going up, it has many multiple reasons, you have to understand that many such shares become multi-baggers, they can go up to 100, 150, 150, 500, so there is no limit to going up and when it comes down, the share of 100 can be of 10 rupees, so there is no limit to falling and there are multiple examples like this. Vodafone is an example in front of you, Yes bank is an example in front of you, the same thing happened in RBL bank and, if I talk about increasing, you talk about Nestle, talk about MRF, if you talk about any big company, the company is fundamentally strong, it is performing, it is generating profit, it has to increase.

As a result, the market will have numerous examples like this that are not fundamentally sound and kept falling, but you did average, let's average in the same trading. What do you do in trading, where there is a loss, you have taken a trade, you have taken a trade-in option, let's assume you have bought call options, you purchased call options, and as a result, all other options are falling. The option was left after you purchased it for 200. Let's say yours is 140. Now what will you do? I will buy it again at 140 and it will go up from here.

Then you saw the trend. Then what did you see? Did there be a breakout? Did you notice anything on the chart that you are descending through? So the first thing is that you should not do this. Generally, if you are doing it, then you should get multiple confirmations and if you trade in options, then definitely use strategies. There is a playlist on options strategy. Now that you know, you'll never have to average on the losing team.

The Fifth Rule

If you are trading, you are trading in options, you are doing intraday, you are doing futures. Do not place one order, place two orders. Now what does it mean to place two orders? We hear stop loss many times. Stop loss should be placed. You assume that a stop loss will be in place if it declines. We will cut the deal. No problem, we will go out. Do you go out? No, we don't go out. Because you think that when you see a loss, then your psychology changes. We cannot bear loss. We think that no, he will recover from here again and we will recover our loss.

You make a mistake here. Now let's understand very easily. Think for a moment that you paid 200 for a call option that you purchased.  Now when you bought it, what did you see on the chart? It is very important. Let's assume that you saw a big hammer at the bottom of the chart. As soon as you noticed the hammer, you entered. You also saw the next candle, which became Marubuzo. You saw Marubuzo being made. Now you are getting a strong confirmation that the price can go very high from here. If you now receive a confirmation, you entered after the confirmation. You took it at its high.

Let's assume entry. Now what did you consider as stop loss? Additionally, you saw the prior candle's stop loss as low. Although my stop loss is present, did you order the stop loss? If you did not place the order of stop loss, then it is not necessary that every time you see it on the chart, it works in the same way. Anything can happen in the market. The price will likely rise a little from here and subsequently decline, leaving you with a small loss. The hammer was probably built in the current fashion at the time. The trend is giving a sign of reversal, but it doesn't need to happen every time.

The trend reversal might not be as strong as expected. If you believe that the trend can continue, then your stop-loss order was not in place. That trend will continue. You can have a big loss. It is always necessary to apply stop loss. That's why don't just place one order. Keep a stop-loss order with it so that you can avoid a big loss. We make a small profit and take a big loss. There is a big loss on this. Therefore, you must realize that your two trades must be put into action. One trade you entered in, whether it was your options trading or you did it in intraday or you did it in futures, but it is necessary to have an order of stop loss with it.