Cheat Sheet

Cheat sheet for the Beginners
Things to avoid

1. Avoid Searching for the Holy Grail. “There is no secret sauce”

2. Stop searching for the paid signals. Most of them are nothing but free resource modified and enhanced with few cosmetic changes.

3. Stop thinking that one could make money using moving average crossovers, MACD Crossovers, RSI, Oscillators, Pivots …etc. These are basic indicators to understand what a trading system is but the winning ratio is very much lower especially in intraday strategies.

4. Stop Predicting Stock Markets using indicators, these basic indicators are nothing but mathematical models which are not predictive in behavior.

5. Stop encouraging your friends if you made some money in this market and if you are very new to stock market.

6. Avoid Indicator Piling. Avoid using too many indicators to increase your winning ratio which actually degrades the performance of your trading system and the probability of winning.

7. Stop Practicing with your money in live market once you are done with some How to trade coaching classes.

8. Avoid Trading in Intraday and Options without having a strategy.

9. Avoid taking trade decisions by combining technical analysis and fundamental analysis. Both are different roads which never met each other.

10. Never think of leaving your day job if you find trading as a interesting game.

Things to Do

1. Understand what a trading system is and try how to build a trading system rather simply following the trading signals blindly

2. Understand the nature of the trading system. Try to understand the risk involved in the trading system rather than the Predictive nature of the trading system

3. Try to understand about back testing rather than paper trading in this live market and save more time in your observation with this stock market

4. Try to use one trading system at a time and one filter to avoid noise. Avoid piling of indicators.

5. Practice with only one timeframe at a time. Avoid taking decisions with multi time frame. Especially more than two time frames.

6. Practice Money management strategies and try to understand how to control your losses rather than how to create the money.

7. Test your trading strategy with few selected scripts but not with penny stocks. Practice your strategy with Indices and Top traded stocks

8. Treat trading as a business and not as a gambling game. You can beat the index averages. And you can make extraordinary profits in securities markets. But you have to strive for excellence in your analysis and in managing the trade.