India celebrates its Republic day on 26th January. It is on this date that the constitution of India came into existence in 1950 replacing the Government of India Act. Constitution lays down the governance rules, regulations and practices for running a state. Just like the constitution is the rule book to govern a state, similarly, there are certain rules for investors and traders in the stock market. In this article, we shall learn about some of the rules that one must apply while trading or investing in the Indian stock market.
Develop a Trading Plan
To be a successful trader in the market it is important that you follow a certain set of rules for trading the stocks. Frame the right plans to determine the entry and exit point of the stock. This strategy might take some time to develop but the results would be fruitful and you would make good profits.
Make it your business
If you want to be a successful trader you must make trading a full-time business. Do not make it your hobby or part-time business. Real commitment and regular learning are essential to be a good trader. That is possible only by treating it as your full-time business.
Put stop loss
Putting stop loss is important when you are trading in the stock market. The first and foremost rule for trader while taking any trade is to a put stop loss. Stop loss assures the trader that the loss in the trade would not exceed a certain amount. The trader may have to face heavy losses if no stop loss is being put.
While trading or investing in the stock market it is important that you study well. Investors for the long term must study about the company and understand its fundamentals. Similarly, a trader should indulge in technical analysis of the stock to take the right trade.
Risk Only What You Can Afford To Lose
A trader or investor must invest in the stock market only if he is willing to take the risk. The investor must know how much risk he can afford to take. In the trading account, he must not allocate the money that is meant to meet the needs and requirements of his daily life. Also never invest or trade in the market by borrowing money.
Know When Not to Trade
While trading in the stock market the trader must know when not to trade. A successful trader is one who knows when it is right to stop. This is possible only with an effective trading plan. By picking the right days to trade, the trader can minimize his losses and maximize his profits.
Keep Emotions Aside
An intraday trader must keep emotions aside in the stock market. Intraday trading comprises of a lot of volatility which makes keeping emotions under control very important. When emotions come into play the trade can go wrong and incorrect decisions can be taken out of fear or greed.
Avoid Over trading
Intraday trading requires discipline. Trading must be done as per the trend of the market. The trade must be taken depending on the amount of risk a trader can bear. Taking too many trades is not a good idea as it exposes the trader to many positions at a single time. And if it does not go how the trader wants it to be, the trader can suffer a big loss. Therefore, a trader must avoid over trading.
Nifty Trading Academy provides stock market education to investors and traders. We make the traders learn about technical charts of the stocks. By having the right understanding of the charts, the traders can take the right trade and make good profits. Even the long term investors can reap the benefits of chart reading by making good investment decisions for the long term. To avail our services you can contact us via call or email.
I am Hitendra Dixit. I am a civil engineer, at the age of 47 I have changed my profession and came in to stock market. I got excellence award for best share market training institute in India. I provide training in live market, during training sessions I do trade with real money in front of members. Many of my members left their job and became a professional trader with my support and guidance.