Biggest mistakes new entrants make

First mistake is thinking that it is all too easy. You click on a button to buy and click another button to sell and pocket the difference as profit.

It is that simple. In the hindsight, yet it is.

The first couple of times into the market, they’ll be right, make a lot of money, think that all of a sudden they’re gurus, not take their education any further, and in subsequent investments they’ll lose the money they’ve made and a hell of a lot more.

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Option Strategy

If you bearish or bullish on a stock, it means that you know what is going to happen. And we have learnt how dangerous it is, the game of finding out what is going to happen next.

One thing is certain though with the advent of technology making it so simple for millions of us to trade day in and day out that there will be volatility in the market.

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Fear Of Loosing Money

Fear. It is a very powerful emotion.

All People Fear Losing Money. This form of fear affects rich and poor alike. The more you have the more you can lose, and therefore the greater the potential for fear in any given individual.

There is another kind of fear which is intertwined with your greed. It is the fear of loosing out. I gave a sell call at 8450 and NIFTY sharply climbed 200 points after my call.

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Why Haven’t I Made Money Yet…

Have you ever wondered, why is it that you have never made money on stock market?

You carry the confidence of a successful person, having worked hard for it and yet when you invest in stocks, you don’t seem to make money.

People look up to you, they respect you, you are the hero for your family. And yet you can’t seem to work the market in your favor.

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Patience and Conviction

Most people think it is relatively easy to make money on stock market. You just need a laptop, an internet connection and a trading account. You buy a stock at low, sell it at a high and that’s it.

Do you really believe it is that simple.

No wonder 90% of people who open F & O account get wiped out in the first year itself.

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Go Against The Trend

They say that in order to make money, you need to take contrarian view of the crowd. Buy when every one else is selling and vice versa.

This strategy could also be fraught with risks as crowd is always right during the trend and they are usually wrong at both ends.

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Don’t Follow The Crowd

Buy what goes up and sell what goes down.

If some one tells you this, it means that he doesn’t have a strategy. He is just following the crowd.

Buy at 30 RSI and sell at 70 RSI.

Lot of people follow this and they too don’t have any research capabilities of their own as the RSI indicators and charts are in public domain and hence are accessible by the crowd. So here in too you are following the crowd.

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