D0’s and Don ts in Stock Trading

Every trader loses initially.
We strongly believe that every investor who comes for trading initially gives losses as he/she is unable to have control over his greed and fear. At times with all the information and luck in his favor, he makes profit, and then because of his new over confidence, trades more which results in his profit gone and also sometimes a portion of his capital gone, This cycle of fear of the losses and greed to earn more makes him initially give losses

The trader begins to make no profit no loss
Out of the total investors who enter the first stage, 80% of them finish off at the first stage only and after a year or two find that the stock market is not their cup of tea. So in the 2nd stage only the 20% investors try to break even in their trading and quite a lot of them are able to have control over their fear and greed with a result that they stop giving losses. Now these traders are ready for the 3rd stage.

The trader starts to make profits
This stage where a trader makes consistent profit i.e. he does not give loss cheque to the broker. In fact this is the stage which everyone wishes to have in the stock market. But we strongly believe that anybody who wishes to
come to the 3 rd Stage has to pass through the above 2 stages.

    * Never risk more than 10% of your trading capital in a single trade.
    * Always use stop loss orders. (Here you should know your loss you can   give in a situation where the trade starts going against you.)
    * Never do overtrading.
    * Never let a profit run into a loss.
    * Don't enter a trade if you are unsure of the trend.
    * When in doubt, get out, and don't get in when in doubt.
    * Only trade active markets.
    * Distribute your risks equally among different markets.
    * Never limit your orders. Trade at the markets
    * Extra monies from successful trades should be placed in a separate account.
    * Never trade to scalp a profit.
    * Never average a loss.
    * Never get out of the market because you have lost patience, or get in because you are anxiously waiting.
    * Avoid taking small profits and large losses.
    * Never cancel a stop loss after you have placed it.
    * Avoid getting in and out of the market too soon.
    * Be willing to make money from both sides of the market.
    * Never buy or sell just because the price is low or high.
    * Never hedge a losing position.
    * Never change your position without a good reason.
    * Avoid trading after long periods of success or failure.
    * Don't try to guess tops or bottoms.
    * Don't follow a blind man's advice.
    * Avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.
    * When you lose don't blame it on luck.

Investors come to the stock market and buy and sell the stocks eyeing the future. The future valuations they arrive at by either calculating the

Fundamental factors on the basis of technical they take their positions.

In the short term it is always the technical factors that are demand and supply of the stock which gives us the directions of the movement of the stock.
Here for the reference of this side, we find that people who come here have a more short term view of the market.
They predict the short term movement of the market, technical analyst gives better results hence, and we follow all the standard technical analysis tools.
There are two advantages in the following technical firstly; it tells us where the share/market is moving up or down.
Secondly, technical are not bothered about the fundamentals or the news (it overrides them).
In technical we are only concerned with price charts and volumes. We believe that at any given point of time, a stock price reflects everything.