Hello Fellow Traders

Hello

I am a new member of the forum with some experience of trading in commodities,futures, FX, bonds and stock markets - mainly in the US and UK.

I am new to the Indian market and am getting up to speed on understanding and analysing Indian markets.

By discipline I am a technical trader and rely on technical analysis performed by myself. My trading is disciplined and risk management forms the biggest part of my trading strategy.

Over the years I have learned that there is no "Holy Grail" of trading - no secret formula that will make you rich quickly.

Trading is a business. Like all businesses it requires a lot of work and effort and discipline. But unlike most businesses it can have substantial rewards if one is prepared to follow the rules and disciplines.

The most important aspect of this business is risk management - one thing we all can be sure of when we enter this business is that we will inevitably end with loss making trades - but this is part and parcel of the entire business which can be classified as "overheads" of trading business.

One can define trading risk management briefly as follows:

1) no single trade should be greater than 10% of your underlying capital
2) no single loss (stoploss) should be greater than between 3 to 5% of your entire capital.
3) the stop loss has to be pre-calculated and must be acceptable to the investor.
4) the risk/reward ratio of the trade must be 1:3 in your favour i.e. if you are prepared to lose one rupee than it must have the potential to make you at least three rupees.
5) if one finds that a single trade requires too much attention or focus i.e. causing sleepless nights than that trade must be eliminated as quickly as possible - because that trade will normally not go right - and will distract one from profitable trades.
6) Never expect a single trade to make back all the losses that one has made in the markets - this seldom happens and it is always a recipe for financial disaster.
7) stop losses must always be executed without fail - waiting for a better price again leads to disaster.
8) never hold a loss making trade and average your position - this hardly ever
works - unless you are accumulating a very large position for a long term trade.
9) Hope is a dirty word in trading.
10) Have a clearly written plan on what you are going to trade, why, how much you are prepared to lose and what potential rewards you will receive.
11) Stick to your plan and execute it efficiently.

There is more to this subject and we will talk about it over time.

Good trading

Nautilus

Hi nautilus,
Welcome to this forum......Your experience would be of great value to all of us ,so post regularly.Happy trading....

Hi Saint:

Thank you for your warm welcom and encouraging words

Nautilus