Process:
Arrange Capital for Equity Trading :
As a beginner, begin equity trading with smaller amounts of money that you can afford to lose in the equity market. Trade small while you’re learning.
Many equity traders lose money in the financial market when they first start equity trading, so you don’t want to risk losing money that you need to pay your basic living expenses. It can also be stressful and lead to take emotional decisions if you see the money that you can’t afford to lose disappearing. By starting small, you limit your losses and make it less likely that you’ll trade unwisely in response to those losses. So, beginning your equity trading career focus on learning and mastering the skill first.
Open a Demat Account for Equity Trading:
Do your research and find the best broker to open your Demat account in the equity market.
I am using a Discount/online broker:
Zerodha Kite: zerodha.com and
Upstox Pro: upstox.com
You are free to choose your broker and do the research yourself and find better for you.
Master the Basics of Equity Market:
To learn the complete basics of price action in the equity market you have to learn 4 things:
1. Support and Resistance:
2. Trend lines
3. Candlestick Patterns
4. Volume
Go to the Setup and Make Equity Trading Plan:
“An idiot with a plan can beat a genius without a plan”.
– Warren Buffett.
Trading Plan:
SETUP:
Entry
Stop loss
Target ( where to Exit)
Re-entry rule ( If there is any)
Pyramiding
Position Sizing
CALCULATED RISK:
Risk Management: Calculated risk instead of Blind Risk. Remember The 2% rule in trading.
This rule says that on any given trade your loss should not exceed 2% of your total capital.
Example: Trading capital= Rs 100,000
Risk per trade= 2% of trading capital : Rs 2000
Make your own rule to Avoid Over Trading.
EMOTION CONTROL:
And you need sufficient self-discipline to follow your trading plan, avoid getting overexcited or depressed in the markets, and resist the temptation to make emotional decisions. This is a very important factor in the trading & investing profession. So, you should have a plan for your psychology management like morning exercise, meditation, YOGA, and daily affirmations.
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Now you have a setup, What next?
Backtesting:
Backtesting is only because of getting more confidence in the system.
The best way to backtest any system is manually one by one chart, which covers all cycles of the financial market.
Task: Practice this system on 40 charts.
By this, you will see how it works and when it gives huge returns like 50–70%. And your confidence in the system increases. When you’ll implement with real money you will execute flawlessly.
Flawless Execution:
Now you have got complete knowledge about the system and backtested. It’s time to implement that knowledge. “Financial education + Implementation = Results”
After backtesting the system, Flawless execution: means acting on an opportunity ( any trade) the moment you see that it’s an opportunity without hesitation.
Maintain Equity Trading Journal and Review:
Why it’s important?
A trading journal is one of the most effective tools for performance management. It is where you record and review daily trades for better output and future reference. A journal can help you track progress as well as study mistakes made when entering or exiting a trade.
I provided you with a simple trading journal in your free gift section. Get it instantly and use it in your trading career.
Don’t Be Afraid to Ask for Help
Many people, including myself, are happy to help people out.
Thank You, I hope you’ve enjoyed this Information as much as I loved writing it for you.
And give your valuable feedback about the information in this article and book.
Learn “How to Make 70% Returns with Equity Trading”