NOVEMBER 20198Trading is an art that you can master by being disciplined.The stock market comprises of a broad variety of play-ers, including Institutions, Hedge funds, Automated algorithms, HNIs, FIIs and other retail traders. In spite of having the option to take a position on either the buy or sell side, most of the retail traders like us end up losing money; and one of the fundamental reasons is lack of discipline.Discipline can be defined as a set of rules that you need to train over a period of time, in order to turn it into best practices that you follow on a day-to-day basis. While reading books helps to an extent, there is no better teacher than hands on practice to make you perfect.The stock market teaches you many lessons, how-ever there are 4 rules that applies to all traders wheth-er intraday, swing or positional traders. All the rules are interconnected and one does not work without the other.1. Only Risk What You are Willing to LoseDo NOT trade in money you can't afford to lose.Before taking any trade in the stock market, position sizing becomes crucial. Position sizing basically re-fers to the size of a position, and helps determine how many units of a security you can purchase, which in turn helps you to control risk and maximize returns.For example, with an initial capital of INR 10,000 I would position size in such a way that I would cap my losses at 1 percent of the initial capital (INR 100) on each trade. Even if most of my trades were to go bad, I would still be OK with it because I had only put up the amount I was willing to lose. 2. Remember you are in it for the short termThe best analogy to ex-plain this point is by comparing a trader to a T20 player. The game is only for a few hours but the pressure is intense and you don't have a lot of time to think. The only difference is, you know that whether you win or lose, you have to come back the next day and do it all over again. LEARNINGS FROM THE STOCK MARKET -- 4 RULES TO LIVE BYBy Jayalakshmi Manohar, Founder & CPO, Streak AI Technologies Pvt LtdIN MY OPINIONAs an industry expert, Jayalakshmi focuses on integration of technology and design to build products that deliver unique value propositions at scaleJayalakshmi Manohar,Founder & CPO NOVEMBER 20198
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