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What is day a day Trading?

1. People believe Trading gambling, but it is not.
2. Trading requires is years of hard work, learning, and discipline. It is not as easy as looks to earn from trading.
3. Trading is about psychology and discipline.
4. Do not trade for Profit. Trade because it is the right thing to do.
5. As a trader one should work to preserve their capital.
6. There is a life outside of trading. It is very easy to lose sight of that and get addicted to trading.

Trading requires Planning–

1. A trade is not just up or down. It is a complete plan, entry, exit, stop loss & target.
2. Trading plan should be simple. Just look at 3–4 indicators. More numbers equals more complications

Select your trade on the basis of your plan:

1. Remember, there is always the next trade. Don’t take stupid risks in the current one
2. It is okay to miss an opportunity. It is not okay to lose money because of impatience
3. Not having a position is a position. Some of the best trades in life are the ones you do not take.
4. Most of the times the best strategy is to sit and watch on the sidelines
5. This trade is one trade of the many trades of a month of the many months of a year of the many years of your trading life. Treat it that way. Do not be attached to a trade. Learn to let go
6. If you are stuck in the wrong trade, you will miss the right trade

Trend following

1. Reversal in a trend happens only once. If you bet on a reversal you will be right only once. If you bet on continuations, you will be right most of the times
2. Never buy a stock because its price has come down. Never sell a stock because it has gone up.
3. Never catch falling knives. Corollary — never short shooting rockets.
4. Buy a technically strong stock, ideally on dips, and sell a technically weak stock ideally on upticks.

Position Sizing

Risk only what you can afford to lose. Trade with the money you can throw away tomorrow and feel nothing about it.

If you cannot sleep peacefully with a position, you need to scale down

Do not have too many positions open. You will not be able to monitor them or think straight

Trade with enough buffer margin. Keep at least 30% extra margin.

Stop Losses

Let your profits run, cut your losses short.

Always keep a stoploss. Your stoploss is not a number in your mind. It is an order in your trading terminal. Keep a stoploss as soon as you place the order.

Holding on to a losing trade is not courage. Getting out of that trade with the belief that you will make it back in another trade is courage

Never let a winning trade become a losing trade. Always keep a trailing stop loss

Never

Never gamble on events

Never listen to someone else, especially tipsters

Never trade when you are in an emotionally unstable place

Never trade to recover lost money. It is extremely dangerous

Never average. Averaging is an easy way to make twice the losses. Stay away from it as much as you can

Never look at the markets or look at your floating P&L all the time

Never try to catch the top or bottom

Best practices

Always learn something new. Do not let a day go by without learning.

Write down your plan and stick to the plan once the market starts. Do not change your plan

Do a post-trade analysis — always. Keep a trading journal

Keep taking breaks. If you are always trading, you are doing it wrong. After a big win, cool off and take a break. After a loss, take a break for at least a day or two. After a big loss, take a week off.

Option Trading

Buy Options ONLY if your move is quick and big

Do not buy options close to expiry

Do not play OTM unless you are very sure about it.

Option sellers win in the long run. Do not let anyone else tell you anything different

The Articles most of contents are taken from Sensibull, some words/sentences are changed to suit to all readers.