Stock Market Tips and Tricks really work?

We have studied so many things till now in my blogs like fundamentals, technicals, news base rally in the markets, many tips and tricks for long term investing as well as short term investing, etc but the question arises that do these Tips and Tricks really works in practicality and if these things work then why each and every investor and trader face losses into the market?

We will see the same in this and all the possible causes that harm our hard-earned money even after knowing all the basic and advanced levels of things for trading and investing.

Theoretical aspects are very different from practical aspects

We all study and gain theoretical knowledge in school colleges in different courses but important is not to learn and write the exams but to understand its practicality which only possibles with practice and experience. Practice and experience can only come with real-time shows and experience. According to me until and unless you will not lose you will not learn because reading books can give you an idea of things but lessons can only be learned when you lose your money. Earnings also cannot make you learn anything but once you lose your money then it will give you a lifetime of lessons of not repeating the same mistake again. For an instant, I was studying options for so many days and read so many books about that. I know everything about option time value and all so tried to go with options trades and buy one option of HDFC BANK, these days it was going good and just after buying that trade the next day I was getting 20% return but without thinking about its time deterioration aspect I decided to wait to get my call double. After one more day my call was showing a negative return and then I keep on waiting to come to my buying prices and after 1 week my 50% money wiped out after that covering that loss I have taken one more option trade of ONGC and in that also same thing happened with me and I keep on waiting to recover my invested amount that was Rs 15000 and on the monthly expiry my 15000 become 0. I have also applied the stop loss in both my trades but there was a big confusion, I thought that the stop-loss is needed to be put only once while entering into the trade, I didn't get that we need to apply the stop loss on a daily basis that's why in spite of putting stop loss, I didn't get benefitted. when my stop loss didn't trigger then I asked the same doubt with my broker so they told me that we need to apply the stop loss on daily basis. On that day, I learned that options trade is like a coke bottle that once the trade is taken then book the profit in one sip otherwise after some time the gas will fizzle out and leave sugar syrup behind.

Emotion driven decisions on investments

Sometimes we know everything and a clear vision about our investment but then also we make decisions with our emotions. In 2018 when I started my investing carrier I was having extreme confidence in the PSU banking sector and invested a lot of money into that due to emotions attached to it that its PSU banking basket will outperform always as the government will never let it down but I was wrong as lost 50% of mine investment till 2020. One should never take emotion-driven decisions as it can lead to your money exploitation. Research, study, and then go with it is the key rule in investing.

It is not compulsory that if any sector is outperforming today will keep going on as it is. After investing if you see that continuously your money is going deteriorating day by day then it is time to get alert and check if your investment is going right.

Overconfidence in your knowledge and analysis

Confidence is good but overconfidence can be worst, there are many investors who have knowledge and experience both and they trade well but sometimes their overconfidence can take everything they earned yet because markets are always uncertain and they always work to prove you wrong so never trust any technical analyst with blind eyes. Your backend plan should always be ready against your trades.

Moving against the trend

We should always cross-check 100 times if we are going against the market trends, we discussed this many times in our previous blogs also that stocks maximum times move with the whole market trend except industry-related or company-related news or rumors. we should be well aware of our decision going against the trend in the market otherwise it would not work.

Newsbase plays

Many of us take the trades wrong time as when the stock was going up and up then we think that why the stock is going up and we buy the stock, just after buying news declared about the company and stock starts correcting from there and our buying becomes wrong.

Always remember that buy on rumors and sell on the news. Avoid taking trades after news come into the markets because the market presumes and digests everything. The stock prices which is available for you now are already priced every upcoming news so taking the trade at this time may be a wrong decision for you.

https://bijimoney.blogspot.com/2020/10/Learn-not-to%20lose%20money.html