When you have chosen stock market for other source of income to help your financial needs or to be independent and completely rely on the trading and be your own boss.
You have done your homework before you enter the stock market world by watching you tube videos and attending webinars and have also pursued online course etc.
Now time is just passing by and it has been 6 months, 9 months and then almost a year, and you are still at profitable and maximum at break-even point.
If you are in the above situation please read the points mentioned herein below and be happy to learn and turn your strategies into profit.
1) PLAN HOW TO TRADE AND DEVELOP YOUR STRATEGIES
2) MAKE YOUR OWN STYLE OF TRADING PLAN
3) Q&Q QUALITY AND QUANTITY GAME
4) ENTER AND EXIT METHOD
5) RECORD WORK ON YOUR PERFORMANCE.
- PLAN HOW TO TRADE AND DEVELOP YOUR STARTAGIS
Foremost and most importantly one must decide where one would like to trade. For e.g. whether one would like to trade in stocks or index or commodity and forex etc. only post this decision, one should fix a capital which may depend on an individual. One should always know his own risk appetite and I would suggest that one should always keep the risk cover as 1 %-2% maximum per trade that one executes.
Further decide one should decide the time frame while trading in the market. For e.g., for intraday executions, keep 5-10 mins or 30 mins max. I would suggest to keep a rough frame of about 10 minutes-20 minutes for the reason being that one can easily analyze the condition of the underlying security and also the market.
Also, one should ensure whether he/she want to step into the market as short time trader or a long-time trader for e.g., whether one wants to make small profits and exit the trade or whether one would like to be a long-time trader which would keep one open in the market and give good returns.
Always remember that one should have patience to give time to trade so that the set target is achievable.
- MAKE YOUR OWN STYLE OF TRADING PLAN
One must always label his/her own ways of identifying stocks and execute trades. If perceived globally, all traders use their strategies in a different way. Some may use valuation of the company, some may use the option analysis, some may use the hedging strategies and some may use chain links etc.
One must design his/her own style of trading and make the most use of it. Also, always be attentive while making your own strategies. If one wants to reach the set target and taste the fruitful results, one must make his/her own strategies and follow only one method of trading strategies.
I personally, for the past 9 years, use charts to execute trades and it helps me in making maximum profits.
- Q&Q QUALITY AND QUANTITY GAME
Once the strategy to execute trade is chosen, one must always make sure that it is a good one by checking it multiple times. One may test his/her own strategy by checking the percentage of the profit-making trade and the loss-making trade.
Always keep one thing in mind, while trading, that it is impossible to make profits every day. While trading one must always execute a trade with the view of having a long-term goal as there are more chances of being on the profitable side than the loss side in the long run. Trading results are always random in the short run.
Always remember that wheAlways remember that whenever one is testing a trade strategy, the quantity does not matter but once ready with the strategy, one should always be concerned about the quantity as it makes a lot of difference in the results. It also helps in reaching the set target quickly. Along with this one should also be aware of his/her own risk appetite and it should also be equally calculated.
Always remember risk should be only 1-2% of the overall capital.
- ENTER AND EXIT METHOD
Once ready with the trading plan, it is time to enter the market and execute the trade. I would suggest to start with a small amount when new to the market. The capital should be of small quantity so that it does not mentally affect, in case, one is losing everything.
When one loses in the market, consider it like you are paying to learn something from the market. One learns the most when he/she make mistakes and/or lose in the market as it creates an impact on mind due to which one will always remember the whole life cycle of the subject.
When one executes trade based on his/her strategy, 1 out 5 things may happen as mentioned herein below.
- Breakeven point (BEP)
- A small profit
- A big profit
- A small loss
- A big loss
First 4 things mentioned herein above are easy to digest but the 5th thing i.e. a big loss must not happen.
If one manages at least one out of the 4 things in the initial days of the trading career, one is close to becoming a profitable trader in the market.
How does one avoid the 5th thing i.e., big loss from happening? One can try to avoid it by keeping strict SL in every trade one executes and never deviates from it.
One should never decide strategy on the first 5-6 times of failing while trading. As I have mentioned earlier, one has to check the strategy multiple times to make sure that it works. Though it is very tempting to try a new strategy, it is suggested to stick to your own strategy.
Remember, in the short run, one’s trading results are random. One needs a minimum of 100 trades, before concluding whether the trading strategy is working or not.
- RECORD WORK ON YOUR PERFORMANCE. (RECORD YOUR PERFORMANCE)
Recording the executed trades is the most important thing in trading. One should maintain a trading journal and record all trades, whether profit or loss.
How can one prepare trading journal?
One can maintain a trade journal by recording the trades which is easy and also important to capture the chart and mention exact place (like marking it on candle) where one buys or where one sells. Screenshot of such chart helps you in the future for reference.
Final Conclusion is that one should review trades after 100 trades based on the chosen strategy and then only find whether the chosen strategy is working well for trading.
Once 100 trades are executed consistently one can review whether his/her own strategy has “value” in the market.
If the trading account is growing after 100 trades then it is in perfect condition. It is more likely that the trading strategy chosen by one has “value” in the market and one has entered in to a profit-making club.
So always be positive and believe that “V” KAN BUILD