My Rules and My Trading!!!!

Trading always comes with varieties. Every trader has his own set of strategies and rules of trading. He plays with his own boundaries and most of the time, ends up out.

Yep, even when I started trading, market kept teaching me new ways to trade and of course it did cost me huge for it. I am interested in presenting my own set of trading rules, hoping that it would help someone in some way. Do not neglect the tips that I given out of my experience, just ‘coz it’s free;)

HAVE YOUR OWN RULES AND BE THE MASTER TRADER….!!!!!!!! 

However cautious a trader is, the market and trader’s emotions win over. Here are my short and effective rules which I always stick on…

1. STOP LOSS    The one rule that I found the hardest to learn, and now it’s the rule which saves me most of the time from loss. Initially it was very difficult for me to put a stop-loss order, and once I started doing that , I could not stop without placing an stop-loss order. As a day trader in a volatile market, stop-loss orders are life savers when used logically. I keep updating on my stop-loss as the market direction and ensure that my stop-loss is based on my risk and returns.  I love when I keep modifying my profit stop-loss 🙂                                                                                                                                                                                                                                     At all times and at all positions , an either a stop up or stop down is mandatory.                                                                
2. OPENING BELL TRADES I never  go in for trade as soon as the market opens, even if I have  strong global market cues and news. I allow the market to show some clear trend or direction supporting my technical analysis and forecasts. Never buy in hurry depending on news, and regret later.  As traders we must always understand that “Public news is always late news”.                                                                                                                                             
3. EMOTIONAL STABILITY  It is very important, that every trader controls his emotions while judging the stock. You might have the best technical analysis and fundamental report in hand, but what if the market fails to follow the same. You must be ready and emotionally stable to plan your exit. Just sticking on to your perception wont really help you. Actually speaking, it happens the other way round for me. Sometimes,  I used to end up selling in  panic  which is harmful too for a trader. This is where I blindly follow RULE NO :1 and wait patiently for the market to give me an entry/exit or accept its end.                                                                                                                                                                                                                                        Markets do have red and blue, it’s up to your emotions to make or lose money.                                                                                                                     
4. PLAN YOUR EXIT  Be disciplined and stick on to your strategy and studies. The acceptable exit could only be when you reach your target price or being stopped out. Give your stock/portfolio the time it needs to perform, don’t fall victim to social media and your personal emotions.                                                                                                             
5. KNOW YOUR TRADES I earnestly maintain a log sheet of all my trades with specific details like brokerage,commissions, profit/loss… It helps me to make my own analysis on a day-to-day basis and  helps me to learn from or rectify any mistake made. (Every brokerage firm gives you a detailed report on your trades, but I prefer doing it myself which makes me even more aware of my trading history)

Following these rules consistently isn’t so easy, but with every trade I am getting better as a trader and so can you! 

Happy Trading!!!!

posted by Sooriya Jayaseelan

Stock Market Indices

What is meant by NIFTY/ SENSEX?

These are the index of stock market. “An index is basically an indicator of stock market, whether the market is going up or down.”  In short, it’s a performance indicator which represents itself by capturing the overall behavior of Equity markets.

INDEX captures the news that is common to all the stocks and brings an average.

How is this achieved?

Every Stock has two good reasons to move up and down

1. News about the company like new product launch or dividend etc…
2. News about the country and that is specific to the company like budget announcement or any natural disaster …

A good index captures these data’s and projects its figures.

SENSEX

• The index of BSE (Bombay Stock Exchange)
• Meaning sensitivity index
• The largest 30 stocks that meet the criterion go into the index.

NIFTY

• The index of NSE (National Stock Exchange).
• The largest 50 stocks that meet the criterion go into the index.
• Meaning national fifty

Major Indices

S&P CNX Nifty

• It is a well diversified 50 stock index accounting for 22 sectors of the economy.

CNX Nifty Junior

• The next rung of liquid securities after S&P CNX Nifty.
• S&P CNX Nifty and the CNX Nifty Junior makes up the 100 most liquid stocks in India.
• The most liquid of the stocks excluded from the S&P CNX Nifty are accounted here for index calculation.
• The two indices are well synchronized such that a stock will never appear in both indices at the same time.

CNX 100

•  Its a diversified 100 stock index accounting for 38 sector of the economy.

The other such Indices are CNX 200,S&P CNX 500,CNX Midcap,Nifty Midcap 50,CNX Smallcap Index,S&P CNX Defty,S&P CNX Nifty Dividend,CNX Midcap 200,India Vix.

Sectoral Indices

CNX Auto Index

•  It is designed to reflect the behavior and performance of the Automobiles sector which includes manufacturers of cars & motorcycles, heavy vehicles, auto ancillaries, tyres, etc.
• The CNX Auto Index comprises of 15 stocks that are listed on the National Stock Exchange.

CNX Bank Index

•  It is an index comprised of the most liquid and large capitalised Indian Banking stocks.
• It provides investors and market intermediaries with a benchmark that captures the capital market performance of Indian Banks.
• The index will have 12 stocks from the banking sector which trade on the National Stock Exchange.

CNX IT Index

• It provides investors and market intermediaries with an appropriate benchmark that captures the performance of the IT segment of the market.

The other Indices are CNX Energy Index, CNX Finance Index, CNX FMCG Index, CNX Media Index , CNX Metal Index, CNX MNC Index, CNX Pharma Index, CNX PSU Bank Index, CNX Realty Index and S&P CNX Industry Indices

Are you new to stock market? A beginners guide

Very frequently we use to hear the news like, “SENSEX or NIFTY has touched the scale of 16,000…” or “BANKING on rally…” or something like this…

As you come across this frequently in news, you start thinking what it is all about. Yes, it’s one of the greatest tools ever invented for building wealth “STOCK MARKET”.  Stocks are a part, if not the cornerstone, of nearly any investment portfolio. When you start on your road to financial investment, you need to have a solid understanding of stocks and how they trade on the stock market.

Over the last few years, the average person’s interest in the stock market has grown exponentially. This demand coupled with advances in trading technology has opened up the markets so that nowadays nearly anybody can trade and own stocks.

Despite their popularity, however, most people don’t fully understand stocks. Much is learned from conversations in the office with others who also don’t know what they’re talking about. Chances are you’ve already heard people say things like, “Amazing time to buy Asian stocks…I have a jackpot call for short term investment…” or “Watch out with stocks–you can lose your shirt in a matter of days!” So much of this misinformation is based on a get-rich-quick mentality.

Stocks can (and do) create massive amounts of wealth, but they aren’t without risks.

The only solution to this is education. The key to protecting yourself in the stock market is to understand where you are putting your money.

It is for this reason that we’ve created this blog to lay you with the foundation you need to make investment decisions yourself.

We’ll start by explaining

• what a stock is and the different types of stock
• about how they are traded
• news and market
• how to buy and sell
• basic technical tools to watch yourself
• trading floor secrets
• rules of successful trading

And much more on this blog !!!!!

Happy Reading!