Trading Deep Knowledge
Hey, today I’m going to talk about trading, such as what trading is, how to do it, what rules to follow in the beginning, how to save your capital, how to manage your money, and how to follow things step-by-step. I’ll also share some information that everyone knows but no one talks about, along with some “dark secrets” you should be aware of before starting to trade.
This information comes from my own work experience and from big traders who have 20 to 40 years of experience in the market.
I started my journey in 2019, and it has been 7 years for me. You’ll learn how I lost money, how much I lost, and later, how I managed my money and controlled my mind so that I didn’t get emotional even after facing losses.
First, we will focus on the basic things because they are what help us climb the ladder of success. I only realized this after 4 years, and this knowledge was right in front of me. Now you’ll get to know it too.
Two Types of Trading
- Swing Trading
- Intraday Trading
Swing Trading
There are two types of swing trading: - Holding your position for more than one day is called swing trading.
- Holding options is also called swing trading.
We will learn about options in another chapter, as they are a very complex and complicated subject.
Let’s understand swing trading with an example. Raju is a shopkeeper who goes to the market every day to buy goods for his shop. The next day, when he reached the market to get more goods, he heard that there was heavy rain and landslides in the areas where his goods come from. After hearing this, Raju started watching the daily news on TV and reading the newspaper. He found out that the news was true, the roads would take a long time to clear, and even the train tracks were blocked due to landslides.
After hearing this news, Raju decided to buy a large quantity of rice, flour, wheat, and other goods. He immediately went to the market, bought a large quantity, and brought it to his godown. A day or two later, the price of the goods had risen significantly. Raju then sold these goods and made a very good profit.
From Raju’s story, we learn that he made a profit by getting the right and accurate information at the right time. Swing trading is just like that. It’s important to keep track of the market’s ups and downs, what a company is doing, and what it plans to do in the coming months. This is called swing trading.
Key notes: - Technical Analysis
- Candlesticks
- Chart Patterns
- Trend
- Support and Resistance
These are all important, and we will discuss them in detail later.
What Is Intraday Trading?
Intraday trading is buying on one day and selling on the same day to make a profit.
There are three types of intraday trading: - Equity Trading
- Equity Options
- Index Options
Options are very risky, and if you don’t understand and learn them seriously, you will lose all your money.
Now, we will understand more about intraday trading. As I said, equity trading involves buying and selling on the same day, where you either make a profit or a loss—one of the two is certain. We’ll understand this with an example.
Shyam is a raw materials trader who sells vegetables like spinach, potatoes, and other produce, which he buys directly from farmers and sells in the market. Just as I mentioned about Raju, something similar happened with Shyam. Due to a landslide, his vehicle is stuck on the road, and it may take four to five days for the road to clear.
If all of Shyam’s goods had reached him on the same day, he would have made a profit by selling them. However, since the loaded truck will arrive four or five days later, most of the produce will be rotten by then. Intraday trading is just like that. If you don’t use a stop loss, the market will take all the money you invested. But if you use a stop loss, you will only lose the amount you had in mind. For example, if you have a capital of ₹10,000 in a trade and set a stop loss of ₹1,000, then you will only lose ₹1,000. We will also talk about stop loss in another chapter because a stop loss plays the most important and significant role in a trading career.
A small baby cannot walk immediately after being born. First, they start moving from one side to another. Then, they begin to crawl on their knees. Then, they try to stand up by holding onto something. When they try to walk, they fall repeatedly, and that is the most difficult time for the baby. But once they start walking, they don’t stop. Have you noticed something from this example of the baby? Just like a child follows things step by step to move forward and then is able to walk, we also have to follow trading step-by-step. We have to learn everything.
I will tell you about all of this, provide a complete roadmap, and teach you as well. Learning to trade takes a lot of time. You won’t be able to learn it in one or two months.