What mistakes do the traders make in a rising market? How can this be avoided. What should the strategy be? Zee Business Managing Editor Anil Singhvi explains the nitty-gritty. If you are a conservative trader you should know when to enter and exit the market and if you are an aggressive trader, you should know your stop loss, he said.
The Market Guru said that aggressive traders should redefine their stop-loss on a daily basis and bring them up in a rallying market. He further advises traders to hold their positions. Traders should make a strategy which suits them, he added.
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Singhvi also pointed out a common mistake among the traders, which is that they increase their trading positions with the rising market. On the contrary, the traders should decrease their trading positions in the rising market, he added. It is not advisable to get over-exposed, he cautioned.
The traders should have a realistic estimate about their ability to take risks as they are in the best position to decide that, Singhvi said. No market analyst or financial advisor can do this on your behalf, he opined.
In a rising market, dozens of calls of cash, mid-cap F&O (Futures & Options) will come for you on a daily basis. As a trader, you have to decide the number of calls that you would want to trade on and for how much profit, Singhvi averred.
To understand one’s risks, is of paramount importance, he said.
The Managing Editor further said that he has been telling Zee Business viewers that traders should not put their overnight positions without hedging them. If you want to keep an overnight position do it in options, he said.
The markets are currently in a better position on the back of liquidity.
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The Nifty 50 was trading around 10,780 today around 12:04 pm, up by over 74 points or 0.7 per cent.