21 Trading Rules To Make Money In Share Market.

November 21, 2011

21 Trading Rules To Make Money In Share Market.

Greetings from Hitesh ! Today I am presenting a collection of thoughts by great traders / investors and writers…….below each thought I have written my comment. Hope my effort will bring difference in your life as an Investor / Trader.

1. “Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do.” ~ Mark Twain. Nobody is reach enough to buy the past….experiment and experience the life as it unfolds.

2. “The market can stay irrational longer than you can stay solvent.” ~ John Maynard Keynes. Mr.Market has its own mood…..just adjust with it.

3. “I never buy at the bottom and I always sell too soon.” ~ Baron Rothschild. Start investing at all the levels…..book profit when you hit your target.

4. “When the facts change, I change my mind. What do you do, sir?” ~ John Maynard Keynes. An investment once done..….should not change till the facts changes.

5. “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.” ~ Warren Buffett. While you can not dictate terms with the market…you can always profit from its mistakes.

6. “It is not our duty as speculators to be on the bull side or the bear side but upon the winning side.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator. Always remember your goal to trade or invest is to profit and nothing else.

7. “The principles of successful speculation are based on the supposition that people will continue in the future to make the mistakes that they made in the past.” ~ Thomas F. Woodlock. So….you profit from their mistakes.

8. “It never was my thinking that made the big money for me. It was always my sitting tight. Got that?” ~ Mr. Partridge in Edwin Lefevre’s Reminiscences of a Stock Operator. If you hold your positions then and then only you will make money.

9. “They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator. Just think what would have happened to Mr.Rakesh Jhunjhunwala had he sold Titan purchased at Rs.40 at Rs.80? He held them from Rs.40 to Rs.5000!!! He is still holding. It needs lot of conviction and patience.

10. “Remember that prices are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don’t make a second unless the first shows you a profit.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator. Play at all the levels…….

11. “A loss never bothers me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocketbook and the soul.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator. If you are a trader….following a stop loss is a must.

12. “If a man didn’t make mistakes, he’d own the world in a month. But if he didn’t profit by his mistakes, he wouldn’t own a blessed thing.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator. Learn from your mistakes and earn from them.

13. “The man who is right always has two forces working in his favor – basic conditions and the men who are wrong. In a bull market bear factors are ignored.” ~ Jessie Livermore in Edwin Lefevre’s Reminiscences of a Stock Operator. Read the market mood and play…..you will make money.

14. [What advice would you give the novice trader?] – “First, I would say that risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half.” ~ Bruce Kovner in Jack Schwager’s Market Wizards. Play bit by bit.

15. “There is probably no class of trades with a higher failure rate than impulsive trades.” Jack Schwager in Market Wizards. Always trade with strategy!!

16. [What is the most important advice you could give the novice trader?] – “Trade small because that’s when you are as bad as you are ever going to be. Learn from your mistakes.” ~ Richard Dennis in Jack Schwager’s Market Wizards. To test your skill trade small in the initial phase and learn from it.

17. “The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.” ~ Ed Seykota in Jack Schwager’s Market Wizards. Loss is inevitable…decide fast how much you will take.

18. “Charting is a little like surfing. You don’t have to know a lot about the phsyics of tides, resonance, and fluid dynamics in order to catch a good wave. You just have to be able to sense when it’s happening and then have the drive to act at the right time.” ~ Ed Seykota in Jack Schwager’s Market Wizards. Catch the trend in the market.

19. “I have two basic rules about winning in trading as well as in life: (1) If you don’t bet, you can’t win. (2) If you lose all your chips, you can’t bet.” ~ Larry Hite in Jack Schwager’s Market Wizards. So, play accordingly.

20. “Perhaps the most important rule is to hold on to your winners and cut your losers. Both are equally important. If you don’t stay with your winners, you are not going to be able to pay for the losers.” ~ Michael Marcus in Jack Schwager’s Market Wizards. Keep the winners…..and shot the losers.

21. “Lose your opinion – not your money” ~ Unknown. Market is always right!!

Hope you enjoyed reading this email…This article is being sent as a part of investor educations initiatives taken by Destiny Management Services. We believe Education is the best place to invest. Do you agree?

Live With Passion…Invest With Passion.

Hitesh Parikh.