Trading

In trading world, small profits lead to riches. There could be few outperforming trades but that is not always true. While trading with a mentality that somehow or by some method you will start to find every outperforming stock and you will make money with speed of light is just an illusion.

The conclusion is, try to be consistent to catch smaller profits, somehow in middle of road you will also get some outperforming results, which will act as a cherry on cake. But take out the thinking you are going to be top richest person with a day or week or a month. There could be a few lucky traders but there is only few in this world.

Most people who trade these days use indicators or oscillators in one way or another, searching for the magic input values to make them work consistently. After losing money and spending countless hours in this effort, they realize that there is no magic set of inputs. The reason for their failure is, they are not thinking about the market as simple as market is.

The market works simply on Supply and Demand factor. So, they should try to evaluate simple methods or indicators according to it. Use the indicators which can give you clear picture of these kinds of basic market parameters. Volumes, patterns and price itself can easily provide the complete story of the market, that whether it is in an uptrend or downtrend or moving in trading range.

(From Mr Sudarshan Shukhani's Post)

The Importance of Discipline

The importance of discipline in share trading cannot be overstressed. That is because in most cases, when people are making money, greed makes them wait for more, and so they don’t book profits. When prices fall, fear makes them sell fast. These situations can be avoided if they know when to book profit/loss. But we can limit our loss by following our stop loss.

The Importance of Selling

Buying at the right price is vital. The ultimate return one will gain on any investment is first determined by the buy price. In a way, one can argue that a profit or loss is made upon buying; you just don’t know it until you sell. And, while this theory is deeply rooted in sound fundamental principles of investing, selling is also a vital link.Indeed, while buying at the right price may ultimately determine the profit gained, selling at the right price guarantees the actual profit, if any.
Thus, if you can’t sell at the appropriate time, the benefits of proper buying disappear.

Words of Wisdom

Always stick to stop loss. Never go against the market trend and never mix your trading portfolio with your investment portfolio. See an opportunity in every market move.

(excerpt from an article on internet)

Trading & Investing

Trading

There is a time and place for everything including trading in the market. Volatility is NOT a good time to trade. We can understand that some traders may be frustrated about not getting any trading ideas. But, we should remember the basic purpose of trading: It is to have a stream of income. Adventure and excitement are NOT meant for traders.When markets are choppy and volatile, we should step aside.

Investing

How to manage a sudden reversal in market sentiment?

Active Investors must have a plan to manage a sharp and sudden decline in prices of a stock, which has been moving up steadily.

Here are some suggestions for managing such sudden events:

1) Always maintain diversification with any individual share not having more than 10% of your total portfolio. If 10% of your active investment was in a stock, then 20% loss would be 2% of your portfolio, a number that is acceptable.

2) If you are trading in a stock, then follow your stops. The stop loss would have been triggered much before the 20% decline came about.

3) If you are an active investor: ask yourself – has the basic reason to buy the stock changed? If not, stay with the stock. If the stock starts underperforming, you will get an opportunity to exit on minor rallies. Do not exit on a panic.


Corrections are periods which require a lot of patience. Investors should understand that they are paid for taking risk, as well as for showing mental strength in difficult times.


(excerpt from an article on internet )