Five Things To Remember While Trading In Equities

I have been trading in equities since many years and have learnt a lot of things. Last two weeks have been great for me, while markets are bleeding; I have been able to make good profit. This is because I keep some important things in back of my mind while trading. Today I want to share some of the things with you. I am sure they will certainly benefit you in your trade.

1. Before you initiate any trade you need to know both Potential PROFIT and Possible LOSS. When you know both, you are all set with your exit strategy.

2. Always average when a stock goes UP, but never when it goes DOWN. If averaged in a short term trade while a stock is falling, it may become a long term HOLD when you don’t want to square off in Loss.

3. Never lose the money that you cannot recover. Your loss should always be less than your profit.

4. Always try to find opportunities in which you can get reward of Rs.10 for risking only one rupee. I never hesitate to lose one rupee when there are Rs.10 on table.

5. BELIEVE in your strategy. If your strategy signals that a stock will fall then don’t have a second thought on it, simply short and make profit.