14 points that every stock market trader and investor should keep in mind by Puneet Marwah

We trade to make profits. Profits are made when you enter and exit at the right price. Technical and Fundamental Analysis helps in determining the entry and exit points. Before driving into these studies, Puneet in session one of "How to become Pro Trader" explains 14 things to learn by each and every person who wish to book trade in market.

Understand the macros: First and foremost thing to do is understand the macros. It is important to know what is happening in the market not only at India level but the happenings across the world. Note down the events that are happening and are expected to happen in near future. List the advantages and disadvantages of each and every event. Note down the effects of such events on different sectors. Having a grip on the bigger picture will help in taking the calculative and correct decisions.

Trades happen when there is a momentum. Momentum happens only when there are events. First stage to understand the markets is to understand the events and the implications these events will have on your trades.

Understand the mindset of FII's & DII's, Fund Managers and Operators: Look at their entry levels by monitoring bulk and block deals. Take that as a support for your trades. When I say operator, I mean the one who is holding major chunk of the stock and his move will have an impact on the movement of the price.

                  
Domestic Institutional Investors has comparatively better hold on management than Foreign Institutional Investor due to their availability locally. FII’s rely on the material like reports and study material available online whereas DII’s has the advantage of meeting management at the frequent intervals and understand their mindset at every stage. Take advantage of the fighting between FII's and DII's to book the profitable trades 

Create buddy stocks: Don't be jack of all and master of none. Buddy stocks are the ones that you know and understand better. Go deep on those stocks. Study them to the last level. It will help you understand the trend and range of the price movements which in return will help you to decide the strategy of the trades.

Clarity of thoughts: Work on sectors that you understand better. The clearer your thoughts are, the more is the possibility of successful trades. Give more concentration on sectors and companies that you understand better.

Plan the strategy: Before entering any trade, have strategies on when to enter and exit. Note down the reasoning with proper facts and figures to have a substance to your strategy. Once the strategy is build go and execute the order confidently. People who become pro are not the ones who come in morning, monitors what others are doing and then decide their strategy. Instead they are the ones, who come well prepared on how the market will behave

Don't assume: Work on facts and figures. No one can predict the future. Avoid using the statements like "I feel". Have proper reasoning on why certain trade will or will not work. You need to have reasons and should be able to prove your study with facts and figures. Markets don't work on assumptions. Fundamentally companies need to be strong to remain strong all the times

Avoid Multiple Trades: Concentrate on limited trades. Don't ever overdo on trade because you think another trade will work more than the trade you are already placed. More the trades you do more are the chances of going wrong. Have limited trades with a bang on entry and exit point

Have patience: You need to show patience to get to your levels to trade. Once you have defined the strategy, wait for that strategy to arrive. Do not jump to trade just because you want to do the trade. Believe in your strategy and let market reach to your level and then execute the trade. Impatience will result in wrong as well as putting multiple trades which is not what Pro traders do. Trades which you stay in will give you profits. Learn the tricks to control your greed.

Search, Search and More Search: Technology has made available any and every information to you at just a click. Search and study continuously about your company, industry and the markets as a whole. If it is not feasible for you to study and you have appointed someone to manage your money, ask questions. Ask the reasoning behind every trade. It is your money and you have every right to know how and why it is invested in certain way. Be passionate and hungry always to know more. Develop the habit of reading, understanding, strategizing and concluding on the subject

Don't fall prey to spammers and stock tip givers: Stop believing people who says, I will make your money double or similar such statements. If they can work on your money to make you earn handsomely, why not they work for themselves? It is your hard earned money. Don't waste on such market tips people Instead of wasting money to pay fees to such market tip givers, invest in study material. Read, learn and then invest.

Work Hard: You can only earn if you are prepared to work hard. The more you practice, more are the chances of going right. Don't be lazy. Laziness won't show you results, continuous efforts will. Stock is rising doesn't mean that it is fundamentally good stock and will make you money. Identify the reasons and then book the trade.

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