TRADING DISCIPLINE

The only differentiating factor between gambling and trading is that in trading we act is a disciplined manner. To keep this difference alive, let’s look at some key trading discipline points: -

• Do not invest more then 20% of your capital in one script. Diversification will always offer you an edge.
• Do not take leverage in Positional Trading. Trade only with the amount that is yours. This will help you stay calm if things go otherwise.
• Make trade at right time, if you missed the trade do not enter there at wrong time. Look for other opportunities rather than over committing towards the lost trade.
• Don’t over trade. If your daily profit target has been achieved then there is no need to make any more trades.
• Do not hesitate to book losses and never let your profit turn into loss.
• Don’t buy something because it is at a low price as it can go further lower . Buy only if you get a clear indication to do so.
• Always ensure that Risk Reward is in your favour. Any trade that does not ensure the aforementioned is as good as gambling.
• Fix the per-trader-amount as per your capital to dilute your trading risk.
• Respect your judgement and research and strictly follow stop loss and target to avoid major loss in a single trade.
• First two hours and the last one and half hour are the best time for intraday trading. This is when the volatility is maximum and the time invested per trade can be very less.
• Do not lose more than 50% of your intraday profit on the same day.