If you are trading casually you will lose money for sure. But if you work on it like a pro you will surly be a winner in a few days time. Here are 5 important tips for new traders to become a good stock trader.
1 – Writing Down Setups Are Most Important
It is very common for a new trader to do mistakes. Even I did a lot of mistakes when I started trading. But do not let these mistakes remain a mistake. Make a diary and note down all your trades. Write the date, time, NSE/BSE levels, any important news event that happened that day or the day earlier, stock specific news in which you took the trade, the reason you took the trade, your trade details.
If you won/lose then write down the reason too if you do have a reason.
Doing the above will take time but the initial journey will become a great teacher in future. In the night read and analyze what you learned from that trade.
With time the losing trades will help you to learn a lot.
2 – Moving Averages Are Very Important
Moving averages are easy to learn and they play a very important part in deciding the future direction of stocks. Learn about them and use them in your trade set-ups. When you become experienced, use Moving Averages to determine buy and sell signals. Moving Averages are usually good for the short to medium term.
I use the 9, 20, and 50 Moving Averages. 9 for holding about a week, 20 for about two weeks and 50 for about one to two months. My stop loss is about 5% and target is 20% and the investment amount is same in all stocks. This is 4 times the loss target.
See what happens if I am 2 times correct out of 4 times (50% success rate):
Stock 1: Buy at 100 sell at 120. (20% profit)
Stock 2: Buy at 200 sell at 240. (20% profit)
Stock 3: Buy at 300 sell at 285. (5% loss)
Stock 4: Buy at 400 sell at 480. (20% profit)
That is = 20+20+20-5 = 55% return.
Fair enough right. Remember that stock investing and target takes time and with mid-caps it varies from 2 days to few weeks. So patience is the key.
3 – For Intraday Trading 5-Minute Chart Is important
If you are trading stocks Intraday it is important to look at 5-minutes candle stick charts. Its not hard to learn basics of technical especially candle sticks. However candle sticks are good only for Intraday trading not for overnight or positional trading. For positional both fundamentals and technical indicators like moving averages, candle sticks, bollinger bands, Relative Strength Index RSI etc are important.
4 – Risk Management
This is where most traders fail. I get 3 phone calls a day. Average loss is 9-10 lakhs. And what is left in their trading account? Just 40-50k. This clearly tells that traders do not manage their risk in the greed to make too much money trading. Greed is not good in stock markets trading.
While trading respect your stop losses, your targets and total money at risk in the trade. In each trade do not risk more than 2% of your total trading money. One bad trade can take out 30% or more from your trading account so be very strict here. Once you become a good trader (winning 60% of your trades) you can risk more than 2% but not more than 5%.
Tip on Risk Management: Do not trade/invest with more than 20% of your earnings (take home salary). For example if you earn Rs. 1 lakh a month, bring only Rs. 20,000 to the trading account. But if you are losing heavily make sure to stop trading and learn once you have lost 1 lakh.
5 – Trading Plan
No business in this world can succeed if they do not have a business plan. Same is with trading. You cannot succeed without a trading plan. You must know why are you taking a trade, how much money you are risking on the trade, what price your entering at, your stop loss, and your profit targets before you enter ANY trade.
The points 4 and 5 above will ensure that you do not fear trading and do not fall for greed as you already know your max profit and loss. Once emotions are out you will become a better trader.
Learn Good Strategies and Have a Mentor by Your Side
Trading by yourself is extremely challenging if you do not have the knowledge and expertise to trade. Without a mentor the learning curve becomes very though and long. Plus you may end up losing a lot of money while learning. Finding a trading mentor is essential for your trading success. You can learn from his experience and knowledge without suffering yourself. Finding a good mentor will save you years of suffering and lakhs of rupees.
You Can Read More On My Site
Hi, I am Dilip Shaw, owner of this website. I am a trader like you. I have been trading since 2007, but lost a lot of money till 2010. I then stopped trading and studied options like college exams. Started trading again from 2011 and never looked back since. I did a lot of research, read books and did countless paper-trading before being profitable. You can read about me here.
My conservative trading course since 2014 is helping many retail traders just like you who have a job or business make consistent profits like this:
What Traders Say About This Course
Testimonials Year 2015
Testimonials Year 2015 Page 2
Testimonials Year 2015 & 2016
Testimonials Year 2016
Testimonials Year 2017
Testimonials Year 2018
Testimonials Year 2019
Testimonials Year 2020 to 2023
What People Say Just After Reading My Course
Emotional Testimonial by a Young Woman Trader and Her Mother
One Of My Client Is Making Rs.25k Per Week
Difference Between Other Courses And Mine
What Others Charge for Courses
You can do this course from your home. Some traders make amazing profits like Rs. 16.26 lakhs profit in 5 days though results may differ for all.
This course helps you learn to trade conservative option strategies for monthly income. Once you finish the course you can start trading immediately. You can start trading from any day. No need to wait for expiry. You will make profits consistently.
This course is good if you have a regular job or business. You DO NOT NEED to monitor your trades every second.
What You Get?
Before reading please understand that for all 5 strategies, strike selection will be taught. Strike selection while trading Options is the most essential part to succeed.
You get two conservative non-directional strategies on options, one conservative stock option strategy and two conservative directional strategies on Future & Option combination.
Non directional trades are profitable 80% of the times and make 3-5% per trade (Results may vary).
Directional strategy makes money fast. It does not matter which side the stock moves. In fact you make more when you are wrong in the Future trade. 🙂 Some amazing profits possible here.
The stock option trade makes 30,000 in one trade and if SL is hit there is a way to recover losses plus make 30k in that trade.
Technical knowledge is NOT required. No need to monitor trades every second.
In the course you will learn how to select the strike prices. You learn when to trade, which strikes to sell which to buy, how much profit target you should be looking for, the best place to take stop loss and what to do after taking stop loss – means how to get that money back. The success rate is more than 80%.
Since trades are properly hedged there is no stress in trading my strategies.
I am very confident that you will make money trading my strategies. To help you succeed I offer few months support for FREE.
11 Reasons Why You Should Do The Course:
1. TA Knowledge NOT required
2. NO Software Required
3. Regular Monitoring NOT Required
4. Continue with Your Job
5. Do Course From Your Home
6. 100% Hedged
7. Stress-Free Trading
8. Not too much money needed to trade
9. Scaling Possible
10. One Time Fee
11. FREE Support For Months
To know more Call/SMS/WhatsApp me on 9051143004 or email me now. I know English and Hindi.
Read the details of the course here.
If you want to enroll for the course you can do so here.
P.S: So many years of trading has thought me one thing - it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. It never happens. But small money accumulated month after month can become very big in only a few years.
WhatsApp or Call me: 9051143004
If you have any question you can contact me.
You can read about me here and my trading mistakes here.
Dilip Shaw, Founder
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INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Moreover stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website.
DISCLAIMER: I am NOT an Investment Adviser (IA). I am an Authorized Person (AP) of a Stock Broker. In other words I am a sub-broker. I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other forms of social media. I strictly adhere to laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles in this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given in this website. I am not responsible for any investment decision you take after reading any article in this website. Click here to read the disclaimer in full.