- Trade only with the money you can afford to lose. Do not take huge positions. You will not be able to manage your emotions.
- Do not trade to get rich quickly or because you think it is easy money. The stock market is among the toughest ways to make money.
- Do not trade when you are in an emotionally unstable place. Trading is all about psychology.
- Trading is all about learning, analysis, and planning. Take time out to analyse stocks every day, and make a complete trading plan — Including Entry, Exit, Stop Loss, contingency plan, etc.
- Always Always Always keep stop losses. A stop loss is an order in the system and not a number in your mind.
- Trade with the trend. Buy a strong stock on pullbacks, and sell a strong stock on upticks.
- Be observant in the market. This does not mean looking at the market all the time, but this means analysing stocks EOD and putting in some effort.
- Be patient for the right trading opportunity to come. The market will always be there, and you will always find an opportunity.
- Do not trade all the time.
- Most of the time, do not take that trade. Sit on the sidelines and watch. Not having a position is a position.
- Wait till you find the right trade, and be aggressive about it.
- Keep taking breaks from trading.
- Do not trade too many stocks at the same time.
- Know your charges very well — The taxes, the brokerage, etc.
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