Here is a list of things you can prepare before the year ends so that you trade stocks well in the year 2021.
1. Check you past trades of 2020. See what mistakes you did. Write them down and try not to repeat those mistakes.
2. In the trades that you were right and book profit – write what happened that you made profits and what you could have done to get better results. You can do these corrections in the trade taken in the year 2021.
3. If there was more than 10,000 loss in a single trade – write down why you did not take a stop loss. Even if your reasoning is correct, it is 100% WRONG not to take a stop loss at minimum 2 and maximum 5% of the margin blocked in a trade.
4. If you took a profit of more than 10,000 in a single trade write the reason. If it was a fluke then you learned nothing from the trade. But if the reasoning is logical, follow such trades in 2021.
5. Most Important: Write down the total ROI in the year 2020. If it’s negative, you have to tell/promise to yourself that this will not be repeated in 2021. If it’s positive, promise to yourself that you will repeat this performance in the year 2021.
6. If you lost more than 5 lakhs in the year 2020 while trading or till today, you are not serious about your money and you do not want to learn. If you do not want to pay and learn, then follow one good strategy, paper trade for 6 months, become master of that strategy and keep trading for your life.
Tip for traders: Whether you are intraday or positional trader remember this advice – keep your profit targets double that of stop loss. Means if you took 10 points profit in a trade, then the next trade you take, should have a stop loss of 5 points or less. In this way, even if you are right 50% of the times you will end up making good money.
Tip for investors: Allocate 5% of your salary for investing in stocks. Do not invest in ay stock because you think so, or your friends think so or someone in some website/tip provider/broker said so. Do proper research before investing in a stock. You can also open a Demat account in Zerodha mapped to me to learn how to choose stocks for investing for the long term, as well as the short term.
If you already have an account in ZERODHA you can open an account in UPSTOX mapped to me.
Zerodha & Upstox are both discount brokers and DO NOT charge any fees for stock buying and selling.
Once the account is opened you can contact me and let me know I will teach you the strategy personally on WhatsApp.
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