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Share TradingShare Trading Ideas for beginners

In order to become Rich you have to do what rich people are doing.

-Robert kiyosaki

(Author of Rich dad poor dad)

 

So, What Rich people are doing in Share Trading?

They are investing and compounding their capital. For that you need a sizable capital.

In order to make money in stocks you have to have money at first place. Yeah! You can’t compound ‘Zero’ right?

 

So, Who are these Smart Money movers here?

Institutions, HNI’s. Yes (Foreign institutions and Domestic institutions as well)

Ex: Mutual fund AMC’s , Mohnish pabrai, Lic etc

 

How these Money Makers trade?

They take a trade only they have edge over the others.

Yes! In order to make money in stock markets you got to have two things one is edge and the other one is Hedge.

 

Edge?

Edge in the form of Research, Analysis etc.

Hedge?

Smart money makers always do hedge their positions by taking counter positions in the derivatives market.

Derivative Market

It means Futures and Options? Oh No! Isn’t it gambling? The futures and options.?

Absolutely not! Futures and Options are brought in for the purpose of hedging.

By doing this you are minimizing the risk in your trade.

So Can I hedge my position 100% ?

Yeah You can But 100% Hedging will give you ‘Zero’ return.

So How do I do it in the right way ?

You have to hedge it in a way that If the trade goes right you win big and even if it’s going wrong you are not going to lose much.

How do I learn smartly?

Here is what Charlie Munger, partner of Berkshire Hathway says

All I want to know is where I’m going to die, So I’ll never go there

In stock markets you have to learn from the mistakes of others. It will save you not only the time also your money as well.

 

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