1. It should be understood in the first place that trading in shares and commodities in a serious full time business.It is not gambling as many view.One of the main reasons for making loss is this attitude of thinking and treating trading as gambling.
2. Trading is an full time business .It requires FULL time and dedication.
3. Trading requires good capital.In today's inflation,even for starting a very small business one requires a capital of not less than five lacs. This is the minimum,in my opinion,one should have as capital before venturing into full time trading.If you do not have the capital,be content with an investor and do not try to become a trader.
4. Do not take exposure limit from brokerage house.It is the first suicidal step.
5. Practice money management .Divide your capital into four equal parts and start with one part at a time and increase gradually.
6. Invest in basic infrastructure.You need a good computer with good internet connectivity and power back up.A quiet room is a must.Anyone compromising on this and planning to trade sitting before a broker terminal will never get anywhere.
7. Read all necessary books on trading.Visit various web sites to gain knowledge.Keep updating your knowledge.Make it a habit to keep updated with national and global events and developments.Avoid having television in your trading place.All news are available online.Do not let the commentators in television disturb you.
8. Know well what you are buying and selling and why and its valuation.Combine fundamentals with technicals.
9. Be very clear about exit of a trade.It is more difficult than entering a trade.Never be greedy.
10. Master the art of controlling emotions. Be it profit or loss,keep cool.
11. Trading is a lone mans business. Do not try for consensus on a decision or trade in a group.
12. Never never go for paid or free so called tips.You are sure to go bonkers if you do the mistake of tasking tips or recommendations.
13. Be realistic about your expected return by trading. You cannot make unrealistic returns.
14. Go for a brokerage house which is reliable and reasonable in brokerage.
15. Master the art of hedging rather than going for stoploss.
