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In this post, read the mistakes to avoid day trading or Intraday equity, options and futures trading. Also read other intraday mistakes traders do.

Any novice equity investor or trader does these mistakes when they start investing or trading the stock markets. Even I have done these mistakes. Hell I lost 7 lakhs. Though 7 lakhs looks a small amount, percentage wise, it was 99% of my savings. I had to take a Rs. 1 lakh loan to survive at a time when we were expecting our first child and looking for a bright future. Life was hell at that time. Thank God things have improved now.

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Learn how to calculate Annualized Volatility and know if it is worth to know about it.

A lot of traders who have done my options trading course, want to know how to calculate Annualized Volatility.

Volatility is very important factor in option trading. This is the reason many traders want to calculate Annualized Volatility, basically to try to figure out future prediction of Volatility.

Please understand that Volatility is different than Volatility Index. Volatility is the percentage of movement of a stock or Index, Volatility Index is the stock market’s expectation of 30-day volatility. Volatility Index is a complex formulae and is constructed using the implied volatilities of a wide range of options available to be traded in that Index. For example Nifty Volatility Index is based on INDIA VIX which can be found here:

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Today we will learn about Stock Auctions done if trader did shorting of stocks without holding them.

Before reading this article I request you to read why an auction is done which is written in this article: Shorting Stocks Can Be Dangerous If You Do Not Have In Your Demat Trading Account.

In short auction of stocks is done if a trader shorted or sold stocks and left it overnight without closing the trade Intraday, and he/she does not have the stocks to sell in his/her demat trading account.

In that case the market makers are obliged to deliver the shares to the trader who paid money to buy the shares. To get the shares from market Auction is done.

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Read to know why shorting stocks can be very dangerous if you do not own the stocks in your Demat Trading Account.

I have done it myself. I mean shorting stocks without having them in my Demat account, leaving them overnight and have faced problems.

Well things have changed for the better but not sure how many brokers do not allow that to happen.

In short here is the dangerous trade:

1. A trader shorts shares of XYZ company thinking that it will go down. He does not own them in his trading demat account – just shorts them as a trade.

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Read to know why taking tips and doing speculative trading can lead to huge losses in trading. It is better to stop taking advisory service and research.

I have written a lot of times why you should stop doing speculative trading and also never take tips to do trading.

When I say this I do this myself and have clearly written in all pages in my site that I do not give tips and will never ever give tips.

In fact people are willing to pay me for tips every month, but I refuse. If I am against something I will never follow it myself just to make money.

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Please read strategies and preparation for stock market crash to understand this post better.

One of The Best Ways to be Well Prepared For Stock Market Crash Is To Diversify

I offer a course in which all instruments of investments opportunities in India are written. It covers all like stocks, mutual funds, even government securities investments and allocations of where to invest what. You can read about the invest well course here.

This will help you a lot to decide how not to keep all eggs in one basket and the best places to invest your hard earned money. With the help of the course you will be able to chose the best stocks, mutual funds and other opportunities to invest. If your money is well diversified, one stock market crash will not make you poor.

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Learn what to do before and after stock market crash and how to take benefit of market crashes.

Stock Market Crash is of Two Types:

1. Sudden Bad News Overnight Market Crash
2. Good or Bad News and Long Time Market Crash or Up Move

I hope the way I have named it, the meaning is quite clear and obvious. The first one is any Terror Attack e.g. 9/11 attacks, Natural Calamity e.g. Tsunami or Major Earth Quake, Financial Corruption in a Big Company, e.g. Lehman Brothers Company Bankruptcy crashed stock markets all over the world for more than one year, and brought one of the biggest financial crisis & recession period in the whole world for 1 and half years.

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Learn why hedging trades is the best way to avoid huge losses from stock market crash as it protects your losses to a large extend and helps you save money.

Date: 06-April-2017

Market Crash is nothing new or unknown. Once in every three years on an average market crashes and then recovers.

Huge crashes are once in a decade. Remember the crash of 2008-09? For one year stock markets all over the world crashed from January, till March 2009. This was almost a 50% crash, and then it took one year to recover.

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A few days back I got this email.

Sale Of Shares By Broker Under Collateral Margin For Pay In Shortfall

Subject: SALE OF SHARES BY THE STOCK BROKER THAT ARE KEPT UNDER “SHARES AS MARGIN”

Email:

Dear Sir,

Kindly advice and educate me as to the SHARES DEPOSITED UNDER ‘SHARES AS MARGIN’ – CAN BE SOLD by the stock broker for the reason “To meet Pay-in Shortfall” – and reduce the Margin
Limit before the date of settlement/expiry.

Example:

I have a Margin Limit of Rs.10,000/- by deposit of 100 shares of Rs.10/- each.

I bought 50 Call Option of AB company for a premium of 100/- each totalling Rs.5000/- today.

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Date: 30-Mar-2017

Today is expiry day of Mar 2017 options. If anyone is trading March 2017 options or futures please close all positions before 3.15 pm today, do not let it expire In The Money – close it.

If your options expire in the money you will pay a heavy fees.

Read the article here:
Close Futures And Options Before Expiry Day to Save Securities Transaction Tax STT

Look what even novice traders tell about my course:

Course 1 – For those who trade options and futures:
https://www.theoptioncourse.com/learn-how-to-trade-options-for-monthly-income/

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