Trading is the most easiest plus the most toughest business in the world.
The best way of doing something perfectly is actually visualising it fully beforehand, making full plans, and then implementing on it. People who never visualise their targets and do it fully without plans and actually without using there own mind, are most likely to fail 99% of the times in this "seems to look easy" business of Trading. Even the World's Best Advisors or the bestest of tips can't help you in making money, if you don't make plans for your "Risk" and "Reward". Always do work in your own best interest i.e. you cannot control what the market does but you can always control your actions and book profits and also start love booking looses.
Be Smart, be disciplined, Follow simple rules and you make the business actually very easy for you.
We advise you to follow these simple rules while trading, with FinWave calls or by any other medium, anytime, on any exchange. You will find out drastic change after implementation, that how you can manage your Risk so well and also with an average accuracy of Tips, you can make good profits.
1. Your Amount on every trade should be same:
Most of the time we come across the clients who make unnecessary losses due to small mistakes, one of those mistakes is trading on different amounts each time they trade. Amount on every trade should be the same. Suppose you decide your amount to be 5 Lacs in each trade. So, to enter a stock of Rs 200 stock, the total no. of stocks you should buy/sell = 500000/200 = 2500 shares.
Similarly, to enter a stock of Rs 1000 stock, the total no. of stocks you should buy/sell = 500000/1000 = 500 shares. This will help you in managing your risk very very simply and easily.
2. Always Follow Stoplosses:
Always Following Stop losses is the most basic and the most important rule you have to understand. It avoids you from getting stuck in one trade and making such a big loss in one trade which will wipe out your profits of 5-6 profitable trades. Stop loss order is the must.
3. Never let your profitable trade go into Loss:
Booking profits in regular intervals and modifying your stop losses is very very important while you trade. We always advise our client to move their SL in remaining 30-40% of the trades to their cost price. So, they take maximum profits home, even if the market reacts in opposite direction later on , your trade ends in profits only and you are not allowing the market to take away your profits.
For e.g. Suppose you buy Reliance Capital at 1100 with SL of 1090, Tgts 1125, 1148, 1160.
So, once the price reaches around 1124-1125 you should start booking profits and move your Stoploss in remaining to 1100 or any other good support levels on the higher side. This way you can reach maximum targets, and can avoid the risk of the trade going into loss.
4. Visualise your targets:
Visualising your daily targets is utmost important. You should have a target in mind for your Daily Profits/Losses.
Ofcourse everybody wants unlimited profits and nobody wants to loose a penny. If you have a target in mind and if that's completed you shouldn't further trade in the day.
Suppose you make a profit target of Rs 15000 daily and u achieve that, then you should be happy and close your trading terminal for the day. This way you can avoid giving your profits back to the markets. If you overtrade and trade further, you might end up loosing your profits.
Simlarly, you should make up your mind and visualise the targets for a bad day too. Suppose you decide that you wont trade further, if you lose more than Rs 7500 in a day. Consider it a bad day and dont trade further. If you trade further, you might do revenge trading and end up loosing a big amount out of emotions.
REMEMBER: Market never moves in the direction you want it to, so, you have to move in the direction the market moves.
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FINWAVE
