Feb 13, 2005 12:20 PM
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(Updated Feb 13, 2005 12:20 PM)
So , you are in the share bazaar . Right? And you are spending peak time of 330 minutes before the NSE/BSE terminals watching and observing the price movements of your favourite scrips giving you adequate aspiration , perspiration and desperation leading to stressful days and sleepless nights. Right? well, it may be or may not be.
And you are here to make a quick buck . Wow! Stock market . especially the day trading part is a dangerously loving game.It is funny , interesting and more addictive than your morning tea. But are you equipped with the right kind of knack , technique and knowledge to face the intra-day volatility and ultimately outsmarting the punters , jobbers and so called operators ? Nop! not at all.
There are certain rules to every game. It may be relationships, sports, business or ''hamara '' stock market. Positively and unfailingly it is not everybody cup of tea. Even the most intelligent and knowledgable day trader can make the most idiotic and stupid mistake drowning himself into heavy losses and abusing the intricacies of the stock market thereafter.
There are no foolproof rules of the stock market game. For every daytrader there is a new morning, new idea , new strategy and a brand new blunder. Still the day could be made comfortable and brighter if you stick to certain norms while
dictating a trade to your dealer.
1 Under any circumstances, NEVER put a market trade at the opening of the market. You may end up buying at the highest rate or selling at the lowest rate and cry for the rest of the day.
2 If you are a staunch day trader just take off the terms like short term medium term and the long term from your dictionary. You are made for a five and a half hour s game only.
3 Use a stop loss ! It is imperative to be disciplined in this business.A rule of thumb is to set stoplosses just below the the low of the day or just below a support level.
4 Don't be afraid to admit defeat and mistakes. Just take your loss and move on.
5 Don't follow the crowd . Avoid herd mentality. It is always better to lead than to follow the herd. Make your own decisions and proceed.
6 Don't pick tops and bottoms.Let the market pick for you.
7 Keep your emotions balanced. Don't lose your cool on bad trades.we have all made them.
8 Watch out for your greed. Swallow your appetite.Once you have made a considerable
profit it is a good idea to take the money and run.
9 Never trade in too many stocks at once. Focus on one position at a time. 10 Do your homework. Study , research and discuss. Trading is demanding. Make a good gameplan.
11 Don't average down. Buy a stock that is going up and short the stock that is going down. Always check the volumes , charts and spreads. Don't take big risks.
12 Concentrate. Don't trade if your life is an upheaval. Be focused.
13 And the bottomline…. Intraday trading of any kind can never lead to wealth creation. It is'' one way in and the same way out'' concept. The lady luck shall not be romancing with you regularly. She is an unforgiving infidel.
Apart from the above academic norms it is strictly advisable to take the services of a financial advisor well versed with the fundamental and technical of the scrips. For an intra day trader it is very very essential to know the support and resistance levels, stop losses , the volatility factor and so on.
Scripted by
ANAND POTDAR
(Equity technical analyst)
Mobile 9302540410,
