First observe and understand the fact that it’s about “trading” and not “investing”. Trading is all about Capital Generation, and investing is all about Capital Appreciation.

Never sit in hope. Always be realistic, practical and disciplined.

Always understand the risk involved in a trade BEFORE entering into it. Always understand that a trading idea is valid only if a support / resistance is not broken, as assumed.

Quality trading is not being sure shot. It’s about managing your risks and focusing on the reward.

Never book your profits early. Always hold your trades with a trailing stop. When targets are met, do not think of more. Book profits.

When target1 is met, then for working on target2 you have the following options: either book now and buy when target1 price is crossed; or book and buy near immediate supports; or hold on with a trailing stop.

While leveraging, always hedge. If you have a shorting trade to do, do that. If you don’t have a shorting trade, buy puts of the support level of index. Take this expenditure as capital insurance premium.

While trading, at times when there is no clarity or there is a 50-50 chance at a situation, you may choose to reduce your risk by paying for it. This looks complicated, but is very simple to understand. For example you are long on reliance, and say at a point it is moving flat. It may turn towards down or up, you are not sure. So in that case, you can either wait with a trailing stop of immediate support, or you may take a calculated risk. If you take a naked risk, then you pay the least for it. But if you want to reduce your risk, you have to pay some capital for it. This is a concept of capital insurance. So, while trading you can choose to exit then and resume as and when the picture gets clear. Obviously if Reliance rallies and you exit and resume again, some of your profits will go. But this will reduce your risk at the moment of insecurity.

Always try to bargain. Stocks move in waves of up and down motion. On minute basis, they may oscillate 1%, and on intra basis they may oscillate 5% avg., and on weekly basis they may oscillate 15% for say. Even if the buy above levels are crossed, just wait for 2 minutes, you might get a cheaper price!

Always focus on one basic concept: Earn 100, loose 10. Focus on making a system wherein you earn a fixed reward on regular basis.

Never try to speculate. Always focus on one basic motto: MONEY. Till the stocks are moving, there are countless opportunities. You just need to choose something that suits you!

Always try to understand the reason behind an action. You should ask your advisor for what reason you are being advised a particular trade. So that when you are in the trade, you should stay there till that reason is valid.

Never buy in bulk in one go. When you have option to spread out, buy or sell in installments.

Be mentally prepared to bear the loss while entering a trade. Never feel bad to exit if your stop loss hits. Just make sure that you take small risks and that the loss money is not too much for you. Do not ignore stop loss and keep sitting in hope.