Trading is one of the most lucrative careers and business options you can choose for yourself. But like any business, you need to understand the different aspects of trading and how your strategies and moves should be affected by it. At the crux of it, the most successful traders are those who follow their strategy without exceptions. Therefore, it is important to understand the overview of a strategy before jumping into trading.

The overview of any strategy should give you more information about the following:

Trading Market

In India, you can trade in currencies, equity, derivatives and commodities.

Time Frame

Different markets trade actively in different time frames.

Equity and Derivatives: 9:15 am – 3:30 pm

Currency: 9 am – 5 pm

Commodities: 10 am – 11:55 pm

Risk Management

Most traders fail due to improper risk or money management. If your strategy has a win rate of around 35%, then a proper risk management system should allow you to remain profitable even after repeated hits. Try to refrain from using high leverage trades and even small losses can mean unmanageable capital loss.

 

  • Risk Management:
  • Stop loss
  • Lot Size
  • Taking small profits

Stop Loss

What makes a trader more successful is how small he/she keeps his losses. We suggest that you restrict your losses to 1% of your capital with every trade.

By defining these components of a trading strategy, all you will need to do is improvise on these individually to improve the overall efficiency of your trades. Happy trading!

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The following advice is issued in the interest of investors:
Safeguard your account from unauthorised transactions. Update your mobile numbers/email IDs with your stock brokers. Get all information related to your transactions directly from the stock exchanges on your mobile phone / email id, at the end of every day. KYC compliance is mandatory when you enter the securities market. It is a one-time exercise done through a SEBI-registered intermediary (stock broker, depository participant, mutual fund, etc). There is no need to repeat the KYC process when you go to any other intermediary.

You do not have to issue a cheque while subscribing to an IPO. Write your bank account number clearly on the IPO application and sign it, sanctioning your bank to make payments when there is an allotment. Your funds will remain in your bank account in the case of non-allotment.