Trading Strategies - The Financial Daily!
Trading Strategies

Develop a Trading Plan

Make a plan and follow your plan. And if your broker knows your plan then he can help you execute it successfully. Not having a plan is a worse mistake.

Always Keep Stop Loss Order

At the time of initiating a position, you must know your exit point to limit your losses. You should never ever enter the market if you are not sure about your stop loss level to accept losses.

Never Give Up Profits

When you make say 1 Rupees profit, you should then be concerned to protect the profit. You should put an order to buy/sell back if the market moves back. This ensures that you get at least some of the profits. When stocks move to good levels then you can consider buying or selling again.

Average with care

Don't use averaging as an excuse to accept the fact that your existing position is a loser and should be cut. You may only average if you have high financial capacity. Only add to your winning positions. Have Patience - Develop the patience to wait for the right levels to take position. Most losing positions are taken when the trader does not have the patience to wait for the right opportunity.

Accept Mistakes

Good traders recognize and accept their mistakes and cut their positions. And they never average. Inexperienced traders run losing positions hoping for reversals.

Don't Get Emotionally Involved

When you make a bad trade, assess it again, develop a new plan and wait for good levels again. Don't rush into new positions.

Have Confidence

Once you have formulated the right strategy and a decision is made to buy or sell at a certain level, do not hesitate to act when your level comes.

Have Discipline

Discipline is what separates well from bad traders. Good traders develop the discipline to wait for the right levels to trade with proper controls and disciplined use of stops (loss profit).

Treat Margin Trading as a Business

Take all the necessary steps to ensure that you make profits and avoid unexpected losses. Manage your trading account in the same manner that you would manage your own business.

Day Trading

The undesirable truth is that Day trading (not leaving overnight positions) offers the very best odds for you to overcome the obstacles to succeed in the market. This way you can measure your performance on daily basis, have fresh market views each day, and you don't have to worry about margin calls. After all, days make up a year and if you handle each day’s trading successfully you’ll have a successful year.

Manage and Monitor your Risk

Always be prepared to take actions in case market goes against you irrespective of what others are saying. After all, it is your money and you must take care of it in a responsible way.

Take Advantage of Ranging Market

Since around 75% of the time market is ranging, find out about each day’s high, low and expected range (compare to previous day) and trade the ranges with protective stops. As most of you have experienced, when the market starts trending people are on the wrong side and lose money. Day trading is recommended