I have 10+ years of experience in stock market trading. And from my experience I can say, yes! Stock Market Trading is a Professional Business!
It is a well-known fact that only 5 out of 100 traders are being able to make huge money in stock market.
But the good news is that anybody can make consistent money in the stock market if he or she follows following 5 rules.
#1: They learn high probability trading strategies from professional traders.
#2: They plan their trade setups in advance according to their detail studies.
#3: They thoroughly study the price charts and fully prepared to enter and exit the market at right time.
#4: They give their best to learn markets and price charts.
#5: They single mindedly focus on high probability methods, risk management and developing a trading psychology.
So these five secrets are behind any successful trader.
Trading Methodologies You Need to Learn to Get Consistent Profits
There are a number of strategies that you have to learn in stock market. And most of these strategies are very complicated for trading. But always keep one thing in your mind that your trading strategy must be simple and easy to implement.
If you observe the price chart you will find first price moves and then the lagging indicators starts showing. Hence your priority should be studying price chart closely.
Trading using Price Action methodology would be the simplest but yet effective strategy for trading stock, commodity and currency market. The Price Action methodology absolutely suits new traders as well as experienced ones.
Your strategy must locate high probability situations in the market. Moreover, the strategy should clearly define when you have to stay away from the market, which is the most vital thing in trading.
Price Action strategy is applicable to Stocks, Index, Commodity, Currency and Options Market.
What is Price Action trading method?
Price Action trading is a method where traders do not use any kind of technical indicators or oscillators. They keep their price chart very simple and easy.
So the trading which is done without using any technical indicators or oscillators is known as price action trading. Price Action trading can be applied to any form of markets such as Stocks, Nifty, Commodity, Options, Currency and Forex Trading.
This is the simplest, easiest and natural way to trade the market. Price Action removes all the clutter and confusions giving a clear picture about the market.
A trading strategy should always be simple, logical, easy to understand and applicable to all forms of markets. The strategy should also help you to locate high probability situations on the price chart.
As you know success lies in simplicity. Simple trading strategy will always produce more accuracy than a complex strategy which is difficult to understand.
Hence traders should not depend upon the technical indicators only. They should also learn Price Action in order to get a clear idea about the market.
95% of People are Losers When it Comes to Stock Market Trading
It has been found that 95% of traders are losers in stock trading. They lose because they really don’t trade the market but trade their greed and fear.
Most of the traders do not follow any rule while trading because their only objective is to earn quick money. So they don’t focus on high probability trade setups.
Moreover, these traders overtrade and that is the big reason for failure in trading the markets.
They do not have a well laid out trading strategy and frequently change their strategy to get quick results. Changing trading strategy every now and then is another big reason for failure in trading.
So this is the reason why 95% of traders are losing money in stock market and only 5% are being able to make good money.
95% of People use the Following Methods to Trade the Market
Now a day’s traders are using popular indicators for trading like moving averages, Fibonacci, MCAD, Super trend, RSI, Stochastic etc.
Most of the traders apply seven to eight indicators at a time reading a price chart. This makes understanding the chart very difficult and confusing.
Therefore, using myriads of technical indicators simultaneously does not give you a clear picture because the chart appears to be very cluttered and choppy.
News Based Trading
Majority of the traders do intraday trading on the basis of news which may or may not be suitable for trading.
Many traders lose their hard earned money by simply trading according to the news.
It is quite usual that the traders really don’t know which news to follow while trading because there is nothing specific to follow.
Most of the intraday and swing traders do not follow any established trading strategy. They don’t make their trading decisions on the basis of any prior studies.
They are ready to take high risk hoping of unrealistic gains but eventually they end up losing huge money. They are extremely addicted to trading and take all their trading decisions according to their personal discretions.
If they believe price is going to be bullish then they buy and if they feel price will be bearish then they sell.
So they buy and sell just on the basis of their gut feeling.
Most of the traders don’t find trade setups on their own. They are always used to take advice from amateurs like their friends.
This strategy is absolutely not suitable if you want long term success in trading.
Is it possible to make consistent money in stock market?
Most of the time when you ask others is it possible to make consistent money with stock trading, the answer that you get is always negative.
The reason is most of the time we meet people who belong to 95% team of failures.
In stock market money is transferred from losers to achievers. In reality very few people like 5% to 6% are making good money trading the market.
Successful traders are making good money because they are doing things differently. They follow proper high probability methods like price action using advanced trading psychology along with proper risk management which other unsuccessful traders don’t follow.
Hence only 5% to 6% traders are making consistent money.
Most of the new traders enter the trading business with their full enthusiasm and yearning to make big money in stock market. But once they start trading their initial stop loss is triggered and they lose all of their trading capital very early on.
So to avenge their loss with the market they indulge in overtrading and trade without any logic or strategy hence ending up losing all of their trading fund.
Finally, these traders accept their failure and quit trading very early on ending their career in stock market trading.
However, if you are a professional trader then stock market trading is the most respectable and a genuine business.
Therefore, stock market trading is not gambling but a serious professional business. It is still bread and butter of many successful traders around the world.
Time frames to focus while trading
There are different time frames to trade the market starting from 1 min, 5 min, 15 mins, 30 mins, 1 hours, 4 hours, daily, weekly, monthly and even yearly.
Intraday traders generally focus on 5 min time frames, Swing traders focus on daily time frames, Positional traders focus on weekly time frames and long term traders focus on wider time frames which are monthly long.
Usually in smaller time frames markets seems to be very complex but in wider timer frames we can get a clear picture about the market.
So is it quite clear that the probability of accuracy in trading will be more for wider time frames than that of smaller time frames.
Different Types of Market
Stock Future Market: Popular Nifty stocks are widely used by traders for trading. Traders also widely trade indexes like Nifty 50, Bank Nifty, IT, Pharma, Energy, Auto etc.
Nifty Stocks has a good volume and volatility. The stocks are generally trending make them good for trading.
Traders mostly like to trade with indexes like Nifty and Bank Nifty. These indexes have good trending nature.
Commodity Market: There are nine MCX Commodities which are Silver, Gold, Crude Oil, Natural Gas, Zinc, Lead, Aluminium, Nickel and Copper.
All of these nine commodities are trending in nature and widely traded among traders.
Currency Market: There are four currency pairs listed on Indian exchange which are USD INR, EUR INR, GBP INR and JPY INR.
Options Market: Most of the traders also prefer Option market for trading. They BUY CALL and PUT Options to make profit from the market. Nifty Options are also widely used for trading.
All of the above mentioned markets are very trending in nature and are really good for intraday as well as swing trading. We can always prioritize various markets according to high probability situation and trade.
How to be a Successful trader in Stock Market?
Learn High Probability Price Action trading methods and master all of them thoroughly.
Learn risk management extensively and follow your position size according to your comfortable risk.
Also learn to develop trading psychology and follow it while trading.
Start your practice trading account now and start checking your progress so that you gain more confidence to trade.
Identify high probability trade setups using various trading methodologies.
Be disciplined and follow all the rules while trading.
Jayant Dange from Mumbai is a Professional Price Action trader for Stocks Commodity and Currency Market. He shares his knowledge to others to follow the same path of Price Action and his goal is to help you simplify your trading and improve your trading results. If you are interested to learn Price Action Trading Methods for all kinds of markets, then contact at 9969721940.