Few important steps for good trading?

interesting topic,first thing to remember there is no universal rule.each day is a new day in stock market,with fresh ideas and new way of earning.a loss to one person is a profit of another person.
the few points you should remember while investing and trading.
a)invest only from surplus money.
b)borrowing and investing could lead to being cut on both sides paying interest and paying for the losses.
c)always do research before investing many people invest and then do research on the company.
d)follow technicals.
e)never chase a initial mistake.learn from that mistake and forget the loss in the initial trade.do not average.
f)start early in your life.
g)invest in a basket of assest class,equity,debt,real estate,jwellery.
h)invest keeping in view when you would need your money back.
i)you could never get the bottom and never sell at the peak always.
j)allow the market to take a complete fall and invest when it starts to rise again.
k)allow th emarket to reach the top .
l)sell your loosing positions at the earliest.
m)hold on to your positions which are in the money.i.e you are making a profit and cost of carry is being paid by the profits.
n)start small.
o)keep a record of your trasactions.
p)once you have entered the market stay invested,and keep learning.use your experience to earn more.do not quit the market at first instance of loss.
q)there is a learning curve for every thing we learn,so give your self time.
r)read the balance sheet of the companies.you would get a idea of business of the company and the prospects.
s)do know your taxation.
t)do not increase your cost of trade.
u)never invest on hearsay,or rumours,or insider news.
v) verify the source of your information everytime,news papers,telivision channels are rigged some times and nearly all the time.
w)do not over analyse..act on your analyse.
x)rate the companies bythere past performance and future prospects.
y)invest in good management..and management with proven track record.
z)seperate the investment portfolio and trading portfolio.
1)it is a never ending learning curve so be a student always.

It was indeed a very good insight you have given Mr.Rao.I think the investors lack the exact knowledge how to invest and sell their shares.I think one should sell the share when the prices are high. I have to say that our people have to rethink before taking any decisions regarding investing..

Mr Rao, your article is good and thought provoking...

Investing is a very serious business.....

I agree that these days each and every one is clued into finance world....Stock market gets maximum coverage...because of the inherent dynamics of equity market. Equity markets becomes attractive due to intense media coverage it gets as well as the price volatility it creates...

My advise would be...
1. Decide in first place you want to trade or invest....
2. Do create a bouquet of your investments.....in case of investing.
3. Invest in only A or Top selected blue chips...
4. At any given point of time do not invest in more than 4 scrips...
5. Have a investing plan ready before you think about investing.
6. Buy only when markets have fallen....and when stock you own makes head lines.i TV channels or News papers ..start deciding when to exit..
7. No matter what the stock, what the business group.or state of economy...have an in-built risk hedging mechanism in your portfolio..in the way of stop loss or trailing stop loss.....
 

      It is a timely discussion and views expressed are excellent.The following tips may be of interest for good investing.As I am not a trader I refrain from commenting on the same.
1. Do not invest in one go.Have a systematic investment plan.
2. Invest for long term ,whenever possible.
3. Do not sell in panic.
4. If you do not either have expertise or time,invest through Mutual Funds which meet your investment plan and risk level.
5. If Fundamentals do not support,do not continue holding a losing investment.Sell at pull backs.
6. Do not over leverage.
7. Have a diversified manageable portfolio.
8. Have a price target at the time of purchase.Book profit once the price target is achieved.
9. It pays to follow Warren Buffet's advice. 'Buy when there is blood bath on Dalal Street and sell when every Tom,Dick   and  Harry is buying.
   Happy Investing. 

I think for small and untrained Investors it is better to avoid direct investments. They can invest in Mutual Funds where professional managers will work your money for you. Doing research by small investors is risky, understanding financial statements,strategies, future stability of growth, value expectation vs price etc;.These work will be done by Professional MF managers and it workd like a co-operative where small sums by small investors turn into big investments by managers. Here the problem is transaction load which the Investor has to swallow, then that is for the professional work done on your money.

very nice and informative insight for investors

The bottom line is if you lack experience and don’t have time for research then go for the indirect route or seek professional help, mutual funds, ulips etc. Markets never reward speculators consistently. 

Overreaction, acting on tips etc should be avoided and contrarian strategy should be exploited. Portfolio should be diversified and never over diversify.  Proper market research is vital and always learn from your mistakes. Accept if you went wrong.. Always do your home work before investing. In the long run good fundamentals always pay. 
 
Most importantly there are no guaranteed returns and so invest only what you can afford. Taking loans to invest can turn fatal. 
Dealing with derivatives other than for hedging and leveraging requires expert knowledge, avoid if you are not one.

The bottom line of this message as i see is, Stick to basics. 
Good and very informative artcile and even a lay man can understand.
Thanks.

Thanks for this nice insight Mr. Durgarao, you have given really very good information mainly, the precautions an investor should keep in mind while investing in the share market is very nice. 

I feel an investor shouldn't over trade. He should sell the stocks when the prices are high. The Investor shouldn't always think of buying at low price and sell at higher price. He shouldn't be afraid to buy at high price and sell at lower price. He should sell the shares when everyone is buying and should buy when every one is selling.
Lastly, I feel an investor shouldn't be a buyer or seller always, He should always work as per market trend and should always follow market trend.

Thanks for the article Durga.....it was very informative......thanks for sharing 

Nice and informative article. Thanks Rao