| 1. |
Diversify - Diversification is must. Dont Buy All Stocks in 1 sector
or 1 Group. Make sure you invest in various sectors. One Should
Invest only 5%-10% in 1 Stock.
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| 2. |
Invest through S.I.P. (Systematic Investment Plan) - Invest Small
Capital every month, don’t Buy All in 1 go. Let Say one has to
invest 1 lac. Invest 10,000 Every Month For Next 10 Month in
5-10 Various Good Fundamentally Companies. “Time is more important
than Timing”
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| 3. |
Trade & Invest Via Registered Companies with SEBI / Exchanges.
Track your Investment & Watch your Contract Notes. Don’t
Deal any Transaction with unregistered brokers/sub-brokers, intermediaries.
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| 4. |
Always Follow Money management & Discipline in trading, Diversify,
Avoid over Trading & Never Loose More than 3% Capital in 1 Trade.
Let your profit run with Trailing Stop Losses. Even 40% Success will
make decent profit over period of Time.
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| 5. |
Do Trade with Trend as trend is only Friend. If Trend is not Clear,
Wait. Sometime No Profit is Net Gain. Trading is a Smart Business
not a stressful gambling. Trade to earn not to fulfill your addiction.
“Patience is the key of Success”
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| 6. |
Always Plan before trading & investment. Trading without planning
is like taking a Journey without Destination. When you get into any
trade, you must know when to book profit, average, get out. Always
“Plan your trading and Follow unbiased consistently”
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| 7. |
Do cut your losses quickly & keep running your profit. Never
shy in booking loss. Accept Failure of being wrong and search
for another trade. Never trade as per ego and emotions. Cutting loss
is important to sustain in market for long term.
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| 8. |
Follow proper Strategy. If you plan to invest in a particular stock
for 1 month. Buy and hold. Don’t exit early if going on expected line.
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| 9. |
Do Trade/Invest in fundamentally Liquid stock only. Avoid Penny
& small caps with no or little fundamentals. If you heard some big
news in that specific stock, and will go sky high then there is high
chance that you are last person who heard that. You might buy when
some big fat cats will exit and book profit and you will left with
nothing but junk stocks in losses for long time.
|
| 10. |
Always Be Invested, Never panic in Crash. If stock is fundamentally
stock and has great future. Be invested and Average on S.I.P. Manner.
In Short term, Fundamental may not work, but over period of long term,
it does works. “Crash is always good for Value Investment”. Don’t exit in Panic.
If you exit in Panic, you exit at very cheap.
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| |
| DON'TS : |
| 1. |
Don’t ignore other Expenses, when you trade, you will have to pay
brokerage fees, Securities Transaction Tax, Telephone, Electricity and
Internet bill. This could decrease your profit if you are trading for very small gain.
|
| 2. |
Don’t Follow Crowd, Rumors, and Speculation. Common Sense is not
so common in market. Only Follow Market Trend. If market is rising
and everyone is saying Sell, Then BUY and Vice-Verse. Always
Remember market is Supreme and it goes in own way irrespective of any reason.
|
| 3. |
Trade & Invest Via Registered Companies with SEBI / Exchanges.
Track your Investment & Watch your Contract Notes. Don’t
Deal any Transaction with unregistered brokers/sub-brokers, intermediaries.
|
| 4. |
For Trading, Don’t Sell in rising market & Don’t Buy in Falling Market.
Avoid Searching Tops & bottoms. Finding Tops & bottoms is like
measuring horizon of Sky. Search Entry & Exit Level only. For
Investment buy every Month in good fundamentally stocks.
|
| 5. |
Don’t put all important money in trading. Only Trade with those
money which you are ready to loose and that money should
not affect your life in any way. There is no “Guarantee Profit” in
Capital/Equity/Stock market.
|
| 6. |
Don’t Always Chase performance. Past performance is not the
criteria for future success. Market is Dynamic and it changes more
often than weather in London. “ if Past performance is all what to do,
All librarians would be most richest one”
|
| 7. |
Don’t make big Investment. Buy fundamentally good stocks in staggered
manner, but don’t put all your money in 1 basket. Put some money
in Debt instrument for urgent requirement. One should not to more
than 80% in Equity. Insurance & Debt/Fixed Income also plays
important role in Asset-Allocation as per individual risk Appetite.
|
| 8. |
Don’t be emotional & sentimental. Market doesn’t
have heart. Market can Rise / Fall Irrespective of News
/Fundamentals/technical’s. Only believe Price not what your
heart and intuitions say. Never be biased towards a particular stock.
If Boat is sinking, don’t pray to God, Just Jump.
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| 9. |
Don’t Blindly Follow News, Media reports, Information and Corporate
Development, It may be Speculation without any fact. Market
generally Discounts early, So Avoid Common Announcement and Information.
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| 10. |
Don’t do Lots of margin Trading. Margin Trading only helps brokerage
companies to earn. Trade with what you have. Losses are also in
Multiple in margin Trading. You may earn some money with margin
trading, but one big correction makes all profit in losses. Cash Trader
must not loose more than 2%-3% capital in 1 Trade and Derivatives
(F&O) traders must not loose 4%-5% in Single Trade.
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