Kavan Choksi Wealth Advisor Lists a Few Stocks Market Trading Rules

Estimated read time 3 min read

Buying and selling stocks in the market is a simple activity in which almost anyone with a sufficient amount of funds can take part. However, it is not always easy to make profits in the stock market. As Kavan Choksi Wealth Advisor says, to grow wealth through stock market trading; one requires discipline, research and patience. Even though there is no sure shot formula to success, there are a few rules one can follow to make sure that they have a high probability of booking profits in the long run.

Kavan Choksi Wealth Advisor underlines rules for successful stock market trading

Trading in the stock market is not always as easy as it seems. There are equal chances of losses and profits in this activity. However, if stock market traders may heed to a few basic rules, they would be able to trade more wisely and make the trading journey profitable. Here are a few rules they should follow:

  • Take informed decision: No matter whether a trader decides to invest, sell or hold, they must have a clear reason for their decision. Conducting proper research is vital to making reasonable decisions. The investment decisions must be data driven, and not sentiment driven.
  • Always use a trading plan: A trading plan generally features a set of rules that specifies the investing, selling or holding criteria of the trader for every purchase. Taking traders outside of the trading plan is typically considered to be a poor strategy.
  • Treat trading like a business: To make money in the stock market, one has to approach trading as a full or part-time business, instead of a job or a hobby. It can be frustrating to treat trading as a job as there is no regular paycheck involved. On the other hand, if it is approached as a hobby, there is no real commitment to learning from the side of the trader. Hence, it is better to treat the activity as a business that incurs expenses, risks, and losses, but also has the potential to deliver high profits.
  • Protect the trading capital: It takes time and effort to save enough money to get a trading account, and doing this twice can be way more difficult. However, protecting trading capital does not mean never experiencing a losing trade. Almost each and every trader has losing trades. Protecting capital rather involves not taking unnecessary risks and putting in adequate efforts to preserve the trading capital.

As Kavan Choksi Wealth Advisor says, in addition to following the rules discussed, stock market traders must also remember to always use a stop loss. A stop loss is a predefined level of risk that a trader is willing to assume for each trade. This can be expressed as a specific dollar amount or a percentage, which restricts the trader’s exposure during the course of a trade. Implementing a stop loss has the advantage of alleviating some of the stress associated with trading, as it ensures that the potential loss on any given trade is limited to a predetermined value. While the ultimate goal is to conclude all trades with a profit, it is important to understand that it may not always be feasible. Employing a protective stop loss is crucial to curtailing losses and risks, preserving capital, and enabling the trader to participate in future trading opportunities.

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