- Trade only with the money you can afford to lose. Do not take huge positions. You will not be able to manage the emotions. Know how to keep your losses small and fixed.
- 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 look at the market all the time, but this means analyze stocks EOD, and put 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
If you would like to read more about the right attitude to trading, please visit the Sensibull Manifesto. I hope you find this useful. Thank you!
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