Wise men say, knowing "what NOT to do" matters a lot than knowing "what to do" and if we apply the same rule to the stock market then you can avoid falling into the traps, you can avoid making big mistakes which will eventually help you to make money in the stock market.
Then, what exactly must NOT to be done while trading in the Stock Market ?
1) Do NOT do anything or do NOT trade into something that you don't know or have understanding of.
2) Do NOT jump onto a conclusion too early just because someone said so rather double check the facts and everything that you want to believe into and remember stock market goes nowhere which means even if you don't trade for a day then thats not the end of the trading world. Stock market was, is and will be there.
3) Never FOMO, Never Panic because often times situations are willingly created to spread fear and panic which is why you must use a proper stoploss or a cover to make sure your trade is safe even in the worst case scenario.
4) Do NOT trade into something that is NOT legit or highly suspicious or is not accepted or regulated by the agencies. For example - Crypto. If you are in a country where the crypto is legit and is allowed then you can trade but if you are in a country wherein the crypto is not legit or not allowed then do not trade because you never know when a new legislation will be passed and your investment in the crypto or something similar will be gone.
5) Do NOT trust any suspicious/sudden market movement and don't trade because everyone is doing so rather wait for the clouds to clear and once the situation is clear then only plan your trades but don't force yourself on the sudden spikes/moves which are tempting
Remember stock market was brought into the picture to make the rich richer and not anyone else, this was and is and will be the core concept of the stock market.
6) Never Ever trade through 1 minute or 5 minutes candles because this creates a lot of volatility and force you to trade through emotions and take hasty and make bad decisions which can eventually backfire. You can use minimum 1 hour candle to trade safely but i always recommend 4-hourly and above candles.
7) Do NOT trade especially when a stock is posting its EARNINGS or a big event is in the picture (like FOMC or Press Conference of the Federal Reserve Chairman) because during these events the stock and an index like S&P 500 or Dow Jones or Nasdaq is 100% manipulated by the stock market manipulators and this is the time when they define the movement, which is why let the event pass and then after 1-2 days once the sand settles down at the bottom of the glass, you will be able to see the picture clearly and will be able to trade safely.
8) Do NOT trade in the Penny Stocks or any company or stock which is NOT suitable to trade or which is always or most of the times highly manipulated or is very heavily volatile. For example, TESLA; Tesla is NOT a penny stock but the VOLATILITY remains very high in this stock which is why this stock must be traded very carefully or can be avoided at times. Always look into the historical movement of the Stock or an index like S&P 500 or Dow Jones or Nasdaq and once you have confidence then you can trade
9) Never ever go against the TREND. If the trend is BEARISH then use any bullish retrace as an opportunity to go Bearish but not bullish and when the trend is BULLISH then use any bearish retrace as an opportunity to go Bullish but not bearish. Stock market manipulators often brings a stock or an index like S&P 500 or Dow Jones or Nasdaq in a situation where a possible change of trend might be seen BUT in actual until and unless the trend changes (100%) do NOT trade because most of the times this "expected change of trend" is just a TRAP and nothing else.
10) Do NOT get greedy when you see the profits and Do NOT get emotional when you see the losses. Grab the profits when its time, use trailing stoploss or differential apprach for the profit booking and you need to understand that losses happens to everyone, even to those who run the stock market and you are not an exception which is why you need to calculate the losses in advance and place a stoploss order or Cover your trades to avoid unforeseen situation.
The stock market manipulators needs to be right only a few times but you need to be right most of the times then only you can save money (to make money)
My Programs :-
a) S&P 500 (Stock Market) Knowledge Transfer Program - https://www.tradingsp500.com/s-p-500-knowledge-transfer-program
c) Patreon community for the daily S&P 500 Analysis and Updates - https://www.patreon.com/LakshmanSingh
