I was following the markets for over 4 months, and have started trading a few weeks ago. Already these are some of the lessons i have learnt and i thought i would share them with all the members. As i go forward, i will keep adding to the list:
A: Trading Nuances
B: General Lessons
A: Trading Nuances
- Always enter a stop loss when placing an order
- Sell orders at lower prices do not work the same as stop losses. The exchange will merely complete the order at the current price.
- Even if you are aiming for a multi-day investment, it doesnt hurt to put a day trade "Take profit" . Remember, the difference between your multi-day brokerage and your day trade can be as high as 1%.
- Always place limit orders
B: General Lessons
- The market is always right
- The market can stay insane longer than you can stay solvent
- Be confident in your strategy, but be flexible about exitting
- Trading on margins is a great way of making money. But they will eat up your account if the market moves against you.
- Paper trade all you want, study all you want, research all you want. The market will be your real teacher, and it will take its tuition fee
- If you are new to the markets, do not day trade.
- Get a good night's sleep. Tomorrow is a new trading day.