5 Trading Rules which Make Money in Stock Market

One can make money by following these 5 trading rules which can help one to make millions from the stock market. However these require the diligence to develop and thus one can become a stock market professional.

• Never Trade Just to Trade.
• Only Buy When Both the Fundamentals and the Technicals Tell You to Buy.
• Never be Greedy; Small Profits Never Hurt Anybody.
• Welcome Unsuccessful Trades.
• Whenever Possible, Utilize Options as a Way to Generate Income in a Flat Market.

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Trading Errors Which Can Mar Your Stock Market Success

I came across an interesting analysis where we can say that problem is not with the market and it may be related with our trading behaviour in stock market.

Check out if you are performing either of these errors

• Are you unprepared.
• Are you getting late in taking action.
• Are you not aware of details.
• Are you Leaving office or desk at crucial times.
• Are you Answering phone calls at trading time
• Are you Talking aloud as if your office was a party
• Are you Not taking care of your trading journal.

Thus make sure to overcome your trading errors and make money daily from the stock market.

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Questions to be asked in Morning before Commencement of Trading

One can ask a few questions in the morning before embarking on the journey to make money from the stock market. These questions will provide you an introspection and will help you to approach the market with correct spirit.

• What is your trading plan for today morning.
• What is your plan if your view is bullish.
• What is your plan if your view is bearish.
• What "method" is driving your bullishness or bearishness.
• What is your pre market trading plan.
• Which method would you focus on in pre market.
• If you identify a good tip in pre market how will you enter it.
• Have you looked at last nights earnings.
• What are the 2-3 best opportunities you must watch at open from that list.
• Have you thought of where you would put stop, how much you will risk on them.
• What will you do if after entry it does not act as expected.
• What is your plan for managing :each" of your position.
• What is driving that decision.
• What psychological tendencies do I need to watch for.
• How can I correct them for next few hours.
• Am I really ready for trading today.
• Have I done systemic analysis of last night opportunities.
• Did I research opportunities/method.
• If I am going to use tip in the morning everyday am I organised for it /is there a set routine for it.
• Is my broker/software set up for it.
• Do I really understand what is involved in trading tip.

Thus make sure that you to answer these questions and thereafter enter in the trade.

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9 Characteristics of Successful Traders by Jack Schwager author of Market Wizards

Jack Schwager has given 9 Characteristics of Successful Traders in his book Market Wizards and same are as appended below:
1. The desire to be successful.
2. The confidence that they could win over the long run.
3. Discipline to follow a given methodology.
4. Taking trading seriously.
5. Rigid risk control.
6. Patience to wait for opportunities.
7. Acting independent of the crowd. (Contrarian)
8. Accepting losing is part of the game.
9. Loving what they’re doing.
Thus aim to be in the league of successful traders and for that one has to undertake the deliberate actions to become successful in stock market.
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Van Tharp’s:10 Common Characteristics in Successful Traders

Van Tharp’s in his latest book “Super Trader has given 10 common characteristics found among successful traders are as appended below:

• They all have a tested, positive expectancy system that’s proved to make money for the market type for which it was designed.
• They all have systems that fit them and their beliefs. They understand that they make money with their systems because their systems fit them.
• They totally understand the concepts they are trading and how those concepts generate low-risk ideas.
• They all understand that when they get into a trade, they must have some idea of when they are wrong and will bail out.
• They all evaluate the ratio of reward to risk in each trade they take. For mechanical traders, this is part of their system. For discretionary traders, this is part of their evaluation before they take the trade.
• They all have a business plan to guide their trading. You must treat your trading like any other business.
• They all use position sizing. They have clear objectives written out, something that most traders/investors do not have. They also understand that position sizing is the key to meeting those objectives and have worked out a position sizing algorithm to meet those objectives.
• They all understand that performance is a function of personal psychology and spend a lot of time working on themselves. You must become an efficient rather than inefficient decision maker.
• They take total responsibility for the results they get. They don’t blame someone else or something else. They don’t justify their results. They don’t feel guilty or ashamed about their results. They simply assume that they created them and that they can create better results by eliminating mistakes.
• They understand that not following their system and business plan rules is a mistake. 

 Thus try to develop these qualities and be a successful trader in life.
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Do's & Don'ts in Share Market to Keep You in The Game for Longer Period

We have always tried to compile the best data available on the net which can bring even a small amount of profit from the stock market and one need to consciousy undertake the action for these listed points. The same are as appended below:

• Never Over Trade - There is nothing called a compulsion that you should trade too much. If you made a decent profit then please stop your urges to trade again and again. Be satisfied with what you made on that particular day. Over trading can only make your broker richer and not you.
• Trade only when there is a right opportunity. Don't do speculative trading.
• Everyone says this and we do tell the same. If you are trading with your broker's money then please do maintain strict stop loss.
• Don't trade in Futures market without proper knowledge. You may even end up losing all your capital plus left with some liability too.
• Options are much better way to trade than futures. But remember options include a time value and the premium falls over a period of time.
• Maintain sufficient margins when you indulge in day trading / derivative trading. Never trade in F&O market taking limit from broker.
• If you are using margin funding from your broker then make use of it only for long term purpose calls. Use this facility up to 50% only to buy shares when market falls. If your capital is 1 lac then don't buy beyond 2 lacs. Buying for 3 or 4 lacs will invite financial trouble even in 1 or 2% market fall.
• And most importantly "keep booking profits" whenever applicable.

Make sure that these actions become your second nature.
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