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