Article written on: 27-Apr-2024 (Data based on April 2024)
Some people start worrying about a small drop in the market.
This is insane.
The recent fall is from 22,753 to 21,995.
This is in percentage terms is 3.33%. Yes points wise the fall looks huge 22753 – 21995 = 758. But in reality, it is just a 3.33% fall. This kind of fall or rise is quite common.
Here is an essential stock trading advice: Do not look at the stock markets with a microscope. This is the nature of stock markets – up and down.
For investors, the exit plan should be after 10 years or more.
For traders, the exit plan should be the target or stop loss, whichever comes earlier.
There is nothing in between. Unfortunately for most traders especially those who lose money trading (they are over 90% according to a recent study by SEBI on derivating trading) – there is everything in between.
First, they will buy an option. Seeing loss they will buy another option to average it out. They end up losing more. In reality, they should have taken a stop loss.
The story is the same for the option sellers.
Decide to take the profit target or stop loss point BEFORE placing the trade, not after. And respect that decision once the trade goes live.
And now even the brokers are advocating to hedge the trades.
You can do my option hedging course, learn hedging with proper planning, and start making small but consistent profits from your trading.
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