Reliance Life Insurance Project Essay

Many people take to traffic in the stupid belief that it is the simplest room of making n atomic number 53s. Far from it, I c in all(prenominal) last(predicate) up it is the easiest way of losing money. There is an old Wall Street adage, that the easiest way of making a underage fortune in the food commercialises is having a double fortune. This high is by no means for the faint hearted. And, this battle is non win or lost during trading hours notwithstanding before the merchandises open notwithstanding through a disciplined approach to trading.1. A winning dealer has a trading plan and does his homework diligently sweet dealers diligently fight down charts and keep aside some hours for mart summary. E very even up out a winning bargainr updates his notebook and writes his strategy for the close day. Winning parcel outrs have a sense of the markets main tr terminal. They rate the warmest sectors of the market and then the strongest stocks in those secto rs. They k today the level they are dismissal to enter at and approximate targets for the anticipated proceed.For ex sizable, I am uncoerced to hold till the market is play playing right. Once the market is ineffective to hold certain levels and breaks crucial supports, I book internet. Again, this depends on the instance of market I am dealing with. In a strong up trend, I want the market to throw me out of a profitable peck. In a mild up trend, I am a little more cautious and learn to book profits at the first sign of weakness. In a choppy market, not only do I trade the lightest, I book profits while the market is still moving in my direction. Good good bargainers do not worry or debate about the intelligence flow they go by what the market is doing. 2. A winning principal avoids overtradingOvertrading is the single biggest malaise of nearly traders. A disciplined trader is eternally ready to trade light when the market turns choppy and even not trade if on th at point are no trades on the horizon. For example, I trade full steam only when I see a trending market and reduce my trading stakes when I am not for certain-footed of the expected move. I reduce my trade even more if the market is stuck in a choppy mode with very small swings.A disciplined trader knows when to build positions and step on the gas and when to trade light and he arsehole only make this assessment by and by he is clear about his analysis of the market and has a trading plan at the beginning of every trading day. 3. A undefeated trader does not get unnerved by losingsA winning trader is always cautious he knows each trade is just an opposite trade, so he always uses money focal point techniques. He never over leverages and always has set-ups and rules which he follows religiously. He takes losses in his stride and tries to understand why the market moved against him. lots you get important trading less(prenominal)ons from your losses. 4. A successful trader tri es to impound the large-scale market moves Novice traders often condemnations book profits as well as quickly because they want to enjoy the winning feeling. Sometimes even on the media one hears things like, You never lose your shirt booking profits. I believe novice traders actually lose their account equity quickly because they do not book their losses quickly enough. Knowledgeable traders on the separate hand, sanctify also lose their trading equity though soft if they are satisfied in booking small profits all the time. By doing that the only person who evict grow rich is your agent.And this does feel because, inevitably, you will have periods of drawdowns when you are not in sync with the market. You can never cover a 15-20 per penny drawdown if you keep booking small profits. The outstrip you will do is be at breakeven at the end of the day, which is not the goal of successful trading. A trading account that is not growing is not sustainable. Thus when you beli eve you have entered into a large move, you need to ride it out till the market stops acting right. Traders with a lot of knowledge of technical analysis, however little experience, often get into the quagmire of following very small targets, believing the market to be overbought at every small rise and uniformly so in all markets. Such traders are unable to make money because they are too smart for their own good. They forget to see the descriptor of the market. Not only do these traders book profits early, sometimes they even take short positions believing that a correction is due.Markets do not generally correct when corrections are due. The ruff policy is to use a trailing stop loss and let the market run when it wants to run. The disciplined trader understands this and keeps stop losses coarse enough so that he is balanced between staying in the move as well as protecting his equity. Capturing a few large moves every year is what really makes worthwhile trading profits. 5. A successful trader always keeps learningYou cannot learn trading in a day or even a few weeks, sometimes not even in months. Successful traders keep reading all the impertinently research on technical analysis they can get their work force on. They also read a number of books every month about techniques, about trading psychology and about other successful traders and how they love their accounts. I often like to think about traders as jehadis unless there is a fire in the belly, unless there is a strong will and commitment to win, it is impossible to win consistently in the market.6. A successful trader always tries to make some money with less tough strategies as well Futures trading, for example, is a very assayy business. The best of chartists and the best of traders sometimes fail. Sure, it gives the highest returns but these may not be consistent and the drawdowns can be large. Traders should always remember that no matter how good your analysis is, sometimes the marke t is not willing to oblige. In these times the 4-5 per cent that can be earned in covered calls or futures and silver arbitrage comes in very handy. It improves the languish term sustainability of a trader and keeps your profit register ringing. Traders must learn to live with lower jeopardy and lower return at certain times in the market, in order to protect and enlarge their capital. develop traders have reasonable risk and return expectations and are open to using less risky and less exciting strategies of making money, which helps them tide over rough periods in the markets.7. A successful trader treats trading as a business and keeps a positive stance Trading can be an expensive adventure sport. It should be treated as a business and should be very profit oriented. Successful traders review their performance at regular intervals and stress to identify causes of both superior and inferior performance. The focus should be on consistent profits rather than erratic large pro fits and losses. Also, trading performance should not be made a judgement on an individual rather, it should be considered a consequence of right or malign actions. Disciplined traders are able to identify when they are out of sync with the market and need to reduce position size, or keep by altogether.Successful trading is like dancing in rhythm with the market. down-and-out traders often cut down on all other expenses but refuse to see what might be wrong with their trading methods. defense team is a costly attitude in trading. If you see that a busy trade is not working the way you had expected, reduce or discriminate your positions and see what is going on. Most disciplined and successful traders are very humble. Humility is a virtue that traders should learn on their own, else the market makes sure that they do. Ego and an I can do no wrong attitude in good times can pass to severe drawdowns in the long term. Also, bad days in trading should be current as cheerfully as the good ones. So disciplined traders maintain composure whether they have made a profit or not on a particular day and avoid mood swings. A good way to do this is to also participate in activities other than trading and let the mind rest so that it is fresh for the next trading day. 8. A successful trader never blames the marketDisciplined traders do not blame the market, the government, the companies or anyone else, conveniently excluding themselves, for their losses. The market gives ample opportunities to traders to make money. It is only the traders fault if he fails to have it off them. Also, the market has various phases. It is overbought sometimes and oversold at other times. It is trending some of the time and choppy at others. It is for a trader to take maximum wages of favourable market conditions and keep away from unfavourable ones. With the help of derivatives, it is now possible to make some money in all kinds of markets. So the trader needs to look for opportunitie s all the time. To my mind, the important keys to making long term money in trading are * Keeping losses small. Remember all losses start small* Ride as many big moves as possible* Avoid overtrading.* Never try to impose your will on the marketIt is impossible to practice all of the above perfectly. However, if you can practice all of the above with some dot of success, improvement in trading performance can be dramatic. 9. A disciplined trader keeps a blowIf new traders are well-fixed to come into a market during a roaring bull phase, they sometimes think that the market is the best place to put option all ones money. But successful and seasoned traders know that if the market starts acting differently in the future, which it surely will, profits will stop displace in and there might even be periods of losses. So do not commit more than a certain amount to the market at any given point of time. Take profits from your broker whenever you have them in your trading account and sto w them away in a separate account. I say this because the market is like a deep and big well. No matter how much money you put in it, it can all vanish. So by having an account where you gather profits during good times, it helps you when markets turn unfavourable.This also makes drawdowns less stressful as you have the cushion of previously earned profits. Trading is about move a tightrope most times. Make sure you have enough cushion if you fall. 10. A successful trader knows there is no Holy grail in the market There is no magical key to the Indian or any other stock market. If there were, investment banks that unload billions of dollars on research would snap it up. Investing software and trading books by themselves cant make you enormously wealthy. They can only give you tools and skills that you can learn to apply. And, finally, there is no free lunch every trading penny has to be earned. I would recommend that each trader identify his own style, his own patterns, his own h orizon and the set-ups that he is most comfortable with and practice them to perfection.You need only to be able to trade very few patterns to make consistent profits in the market. No gizmos can make a difference to your trading. There are no signals that are always 100 per cent correct, so stop face for them. Focus, instead, on percentage trades, trying to catch large moves and keeping your methodology simple. What needs constant improving are discipline and your trading psychology. At end of the day, money is not made by how complicated-looking your analysis is but whether it gets you in the right trade at the right time. Over-analysis can, in fact, lead to paralysis and that is death for a trader. If you cant pull the stir up at the right time, then all your analysis and knowledge is a waste.