Investing Vs Trading

#13
I agree with you on all your points. Borrowed money, penny stocks are a complete NO NO. As far as fixing a target is concerned, I have a different strategy - I fix a target and if the scrip shows some aggressive moves of a breakout, I sell half my stocks and do profit booking. Then I watch the resistance levels and fix my stop-loss levels(in case the scrip corrects). I like to sell this way.
 
#15
Hello,
its nice to see this kind of topic,its a must read for starter's.
All the best.
Gaurav Sapra
nkpanjiyar said:
First of all, everyone should understand the key difference between Investing and Trading.

Beginners, new comers in stock market should first try to become an investor instead of trader. I read in one article that 90% of day traders lost money at the end of the day as per a study of Taiwan stock market.

Let us leave trading to people having money. We can follow the following Golden Principles according to me:

1. Invest your own investible funds - not borrowed funds or funds kept aside for some other commitment. One shouldn't depend upon this money.

2. Fix a profit target and wait till that is reached. Don't panic even if the index crashes to 1000 points.

3. Don't fall into the trap of margin utilisation - a ploy by brokers to relieve you of your hard-earned money.

4. Don't listen to people recommending penny stocks & fly by night operators.

5. Give time for your money to grow. If you want it to grow very fast,then it can also come down very fast. Law of gravitation applies to money perfectly.

There is no reason why we should lose money.

cheers,
nkpanjiyar