EquiTrade - A blog about equity investment and trading

Five Things To Remember While Trading In Equities

2011-09-22T11:37:00.000-07:00

I have been trading in equities since many years and have learnt a lot of things. Last two weeks have been great for me, while markets are bleeding; I have been able to make good profit. This is because I keep some important things in back of my mind while trading. Today I want to share some of the things with you. I am sure they will certainly benefit you in your trade.

1. Before you initiate any trade you need to know both Potential PROFIT and Possible LOSS. When you know both, you are all set with your exit strategy.

2. Always average when a stock goes UP, but never when it goes DOWN. If averaged in a short term trade while a stock is falling, it may become a long term HOLD when you don’t want to square off in Loss.

3. Never lose the money that you cannot recover. Your loss should always be less than your profit.

4. Always try to find opportunities in which you can get reward of Rs.10 for risking only one rupee. I never hesitate to lose one rupee when there are Rs.10 on table.

5. BELIEVE in your strategy. If your strategy signals that a stock will fall then don’t have a second thought on it, simply short and make profit.

Some More Stock Market Facts

2011-09-18T12:49:00.000-07:00

Most stocks open in green every morning.

Many times a stock’s previous day trading decides its today’s trading.

When you don’t square off, but average and hold shares, you lose money even when you are sleeping.

High Volatility = High Risk/Reward
High Volume = High Volatility = High Risk/Reward
News = High Volume = High Volatility = High Risk/Reward

Some Stock Market Facts

2011-08-28T09:48:00.000-07:00

It’s not stocks but the correct strategies which help you make handsome profits.

In a Bull market most investors make profit while in a bear market only lucky investors make profit.

To benefit from a fundamental stock one needs to identify its potential before it is revealed to everyone.

It is always wise to enter in a stock when it has low volatility because it is always followed by high volatility.

Bottoms are support levels and highs are resistance levels; however, it isn’t must for a stock to stop at either level.

A nice quote

2010-10-25T09:39:00.000-07:00

“There is always right time to invest in stock market; finding and investing in an undervalued equity matters."

– Sumit Khandekar

Monthly equity investment tip - July 2010

2010-07-22T11:42:00.000-07:00

If you want to be a smart investor then surely avoid investing in PSU stocks.

Now you will ask: Why?

A very good reason is, PSU stocks most of the times perform because of a regulatory change. If the change is in their favor, they jump rapidly. Contrary to this, if the change is negative, they fall rapidly.

Now you will ask one more question: Why shouldn't I invest in a PSU stock which is in uptrend after a positive regulatory change?

Remember PSU stocks are very slow movers, so if you get trapped at a higher price then you will need to wait for a long time to recover your investment.

Now you will ask for an example of a slow mover PSU stock: A very good example is NTPC. In August 2009, NTPC was available around Rs. 220, the same stock is now available around Rs. 204.

Sell on rise

2010-06-01T04:17:00.000-07:00

Thanks to all negative news around the world, global equity markets are in clear down trend. Analysts are already talking about support levels, but this is not one week or one month down trend. Markets will remain in down trend for at least four to six months.

As markets are poised to go down, the best strategy for any investor would be sell on rise. For example, you have Tata Motors shares; you sell them at Rs. 750 and again buy at Rs. 680. Once you get shares at lower price, sell them again when they reach Rs. 730. This strategy will work for almost all the stocks except for some defensive stocks (Pharmaceutical, Power, and Technology).