• Hemant Kothari posted an update 6 years ago

    Markets are created to kill traders, brokers suck. Markets need fresh supply of looser regularly. zero sum game, it’s a minus sum game. casino makes 3-5% from both parties, this is slippage. Trader has to be at distinction, not just above average. Common slippage is brokerage, volatility is another slippage – higher volatility increases risk especially when in loss; trade liquid markets. Cost of internet, computer, data and most importantly time of trader. Goal is to trade well, money follows. Risk and comfort attracts people to markets. Most often novice traders ignore timings and hard work that is required. Trading right is most important. Markets offer unlimited opportunities to make money or to lose. Keep emotions and personal risks at bay. Each trader is competing with one of the best brains in the world. Read every book-on trading psychology, have a plan and a journal. Be clear on maximum amount you can risk, maximum amount you would risk on any one trade. Diary must show record of each entry, exit and reasons. Analyze weekly and monthly, quarterly and annually. Follow Strict money management rules. Discipline, strategy, isolation, networking, reading and upgrading,
    1. Decide to trade for decades. It’s not a onetime activity. Build long term mindset and systems.
    2. Learn as much as you can. Be skeptical
    3. Do not get greedy and rush to trade. Markets will give more and more opportunities in future.
    4. Develop method to analyse the market and confirm trades. Different Methods for different markets- historical data- then real money. Bull/bear/transitional. Equity/commodity/forex
    5. First goal to protect the capital, 2nd – steady growth of capital though small profits, 3rd goal – long-term wealth.
    6. How to avoid losses – avoid impulsive trades.
    7. Look in self – being thinking and acting. Analyze self regularly.
    8. Buyers and sellers and undecided traders are 3 participants. Buyers and sellers bargain. Undecided spoil the market, they are emotionally driven.
    9. Wise traders enter when markets are silent and exit when markets become violent, volatile or vibrant. Crowd behavior exists also in trading.
    10. Decide max loss per trade, per month while initially decide max risk to decide whether to trade now or gain better knowledge.
    11. The Crowd – book on crowd psychology. Tulip mania. Charts display mass or crowd behavior.
    12. Most traders buy when markets are rising.
    13. Analyze the strength of bulls and bears. Price patters are important. Behavior repeats.
    14. Real Charting is simple. It refers only mindset of bulls vs bears. Only pen and pencil is required.
    15. Bullish markets – Monday profit booking and highs for week are normally plotted on Monday. Enter on Tuesdays a and exit on Monday morning. Opening price reflects amature behavior. They are active early in day and week.

    CS Hemant Kothari

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