Old thread... but still, I would like to add how I lost my money.
I am a "just born" in the market. I started trading only in the month of March 2016. I knew/know nothing. Let me share my story with you.
My capital is very very small and it still is. Just Rs 10000. I opened account with geojit. On my 3rd trading day, I came to know that Geojit gives something called buying power BP, which approximately is 30 to 40% more than your cash balance. For me it was 100% more, may be because I am prone to make mistakes, may be.
So, I looked at this stock Lupin. As I told, I knew nothing. I checked "activity with more volume" in geojit and chose Lupin. To be honest, I neither know what Volume is nor What activity with more volume is.
On my 4th trading day,
22-Mar-2016 Qty 3 Buy: 1537 Sell: 1544 Profit: 21 Brokerage:7.65
It looked okay for me. 13Rs Profit. Cool man. Thought, Go with stocks which are active with more volume, thought I dont know what it is.
On my 6th trading day,
28-Mar-2016 Qty 1 Buy:1510 Sell:1495 Profit: -15 Brokerage: 0.9
28-Mar-2016 Qty 1 Buy: 1510 Sell:1505 Profit: -5 Brokerage: 0.9
It looked Okay again. Thought, You loose. loosing is alright as we earned some profit already. Lets gain from where we lost some other time. (Dont do this.)
On my 7th trading day, 29th of March, here comes the disaster. In the order of quantity, Buy, Sell, Profit/loss, Brokerage
10 1404.45 1292.6 -1118.5 8.09
1 1382 1310 -72 0.81
2 1398 1345.6 -104.8 1.65
2 1333 1336 6 1.6
1 1451.65 1477.05 25.4 0.88
1 1470 1374.4 -95.6 0.85
1 1451.65 1385 -66.65 0.85
Lesson learnt hard way:
Never use buying power.
Never try to gain from where you loose.
Never think you are right.
Never never never think that your strategy is correct and you implemented it wrong. Its your strategy which is wrong.
I learnt that there is something called stoploss, But till date, I dont know how it works and how to implement it in NOW. I will learn it.
I learnt that there are things called panic selling. You need to see volumes to understand if a downfall or nosedive is panic selling or actual downfall.
After learning about panic selling, I am now using it for my strength. I am betting unreasonable low prices on some stocks, who knows it may hit or may not. I dont have much to loose in that case. Market may prove wrong. But its okay. I will learn from it.