GOLDEN RULES OF STOCK MARKET

GOLDEN RULES OF STOCK MARKET - ALL ABOUT DISCIPLINE 

Rule 1

— Invest in the business you understand: It’s always more beneficial and fruitful if you invest in the business rather than stock! In other words, before investing in a company, you should know what business the company is in and what’s there future is likely to be. Proper research should always be undertaken before investing in stocks.

Rule 2&3

— Always remember, if market is not stable and very volatile, please stay out of the market for few days, staying away from the market is also A POSITION (which is very tough to do but always beneficiary!)

— Most of the time, market will go against your wish, so always put STOP LOSS and calculate how much loss you can make in that particular trade if that goes against you.. Do not trade in volumes especially in margin plus or take multiple lots in future plus etc…

Rule 4&5

— IMPORTANT POINT: Rather than booking the profit in short term, always place the SL at that point where you want to book the profit and let the profit run if it keeps for few hours, profit will be much higher…

— Monitor meticulously: Financial markets are connected worldwide from one way or another! Any important event happening in any part of the world has an impact on our financial markets. Hence we need to constantly monitor and keep changing our portfolio to create long term wealth. 

Rule 6 & 7

–Patience pays always in the stock market, you need to keep the stock for 2-4 hours to 2-4 days to earn maximum profits and avoid huge brokerages… the best way is to revise the stop loss to your buy or sell price and let the profits run for a few hours or days you will always benefit more and save brokerages also.

— STANDARD STOP LOSS – For all the cash positions always keep 20% as your stop loss and 1.5% if you trade in futures. Always keep modifying your stop loss as per your discretion /targets especially once you come in a profitable trade.

Rule 8

–IDEAL PORTFOLIO – Please ensure to diversify your portfolio by investing equal amount of money in all the sectors like Banking, IT, Auto, Capital Goods, Pharma, Media, Oil & Gas, Metals, FMCG, Reality, Cement, Power, Telecom etc. as that will help you as some sectors/ stocks will always work for you even in weakest of market. NEVER put all your money into one sector/stock. Ideal stocks should be constituted of blue chips as well as quality midcaps stocks giving blockbuster results along with divided yield companies.

Rule 9

— For all the newcomers – please REFRAIN from thinking of playing in BTST / STBT future calls as it is high risk/ high return trade and only for experienced and professional ones. Still, if you wish to trade in futures/options, please take dummy trades in excel for a month or two at least to see that IF you can handle the volatility of futures. Also, please do not borrow money to trade/ invest in stocks… We keep on recommending stocks for short term (1-3 months) to long term (6 months to 3 years) at every corrections/dips opportunity. Please invest for long term wealth creation. IDEAL scenario to utilize your surplus money is — You should put 25% each of your surplus money in Real Estate (Property); 25% in Gold; 25% in NSC/ Bonds / Fixed Deposits and rest 25% money in equities only. I hope this helps!