I began trading in the stock market twelve years ago.

Initially every trader goes thru a period of learning. They commit mistakes, lose money, make some profits but more losses. They wonder why markets are always moving against them. Some even curse the markets. They look at it as their enemy. A successful trader is one who goes thru all these experiences and comes out better equipped learning from these experiences. The traders who don’t learn from their experiences and mistakes are the ones who never succeed and leave the market after losing all their capital.

I began trading by investing in new issues. Thereafter I migrated to buying and selling in the market thru brokers. There after once online trading began I could trade more frequently because of the ease with which I could buy and sell shares online. Investing in equities in the market and then waiting for the price to rise is a pain. It is boring and you start to get the feeling that you have to do something. This is what happened to me. It is then that I started to look at futures. Like a child who has been given a new toy to play, I found futures quite interesting. So far by investing in equities I could only make money if the prices rose. That is in a bull market I was active and I could earn profits. But in a bear market I had nothing to do except hibernate waiting for the markets to turn around. After studying and understanding the futures market I found that one could make money not only in rising markets but also even in falling markets. This initial joy led to entering into trades left and right. All of you must be aware what happens. I lost quite a lot of my capital. Immediately I started to curse futures and the market. Although the futures market had no role in this and I had lost capital because of the initial euphoria with which I started trading without fully understanding what was in store. I decided that I should read and learn about day trading from experts and follow their advices. I started on the path of learning. I began reading books on day trading and going thru the articles on Internet. What I could conclude from them was it is not possible for anyone to predict the market and the markets behave erratically. It is the crowds that decide on the movement of the market. If you go along with the market your chances of earning profits are more.

From what I learnt I have summarised some of the important ones below:

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  When you are into day trading, fundamentals take a back seat. It is the technical charts that are used more often to analyse price movement.

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  The secret for successful day trading is to learn how to read the markets, and what to do in various demanding situations.

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  Day traders lose money because they enter into the market and exit from it at the wrong times.

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  When the price is moving in their favour they are eager to get out of the market and when it is going against them they hesitate to exit. That is they don’t follow the stop loss system

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  Averaging stocks when the trade is going against you. You should not average losers. You should average winners.

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  Statistics reveal that nearly 80% of those who do day trading lose money. You should not trade with emotions. Greed and Fear are the two emotions. If you trade with these emotions then it is the right recipe to lose money

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  In one day you cannot become an expert day trader

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  You should learn from your mistakes. When your trade goes against you and you lose money, find out why it happened and learn from the mistakes. You will more likely start making money.