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Why Stoploss Is Very Important?

 

If you wish to become a successful trader in the share market then the 4 step analysis is very crucial in trading as mentioned in our earlier blog. Do check that out. So the first step is to check the market valuation. The second step is to check the market direction.  The third step is to check the direction of the share you wish to invest in to. And the fourth step setting up a stoploss which is very important.

 

When we had previously uploaded our blog on 4 step analysis; in that we had recommended the share of Tata Global Beverages along with a case-study.  And yes, Tata Global Beverages gave excellent returns.

 

Now after that people are waiting which share we’ll be recommending next. But it is important to note that even we can go wrong while giving recommendations for educational purposes as well. It is important to trade by following money management and stoploss. As anybody can go wrong in the market at anytime.

 

If we analyze the current situation we’ll find that the market valuation is expensive at the moment. Hence, it is advised to trade with less capital as the market is expensive. The trend of the market is in uptrend till the market is above the support level.

 

So then where to trade? As we know we should opt for the share which is in uptrend. According to the famous trader Nicolas Darvas’s Box Technique; we should opt for that share which is trying to move out of the box and which is giving a bullish signal. As per the current situation, talking about the pharma sector, pharma index after moving in a limited range i.e. after moving in a box has now given bullish signal. So in pharma sector, be it Torrent Pharma or Dr. Reddy’s have given such signal. Dr. Reddy’s after moving in a limited range, has given an uptrend signal after trying to move out of the box. So according to the technical chart till the share is above the level of Rs. 2920, it has given a bullish signal for the short-term. Also, it is important to place a stoploss here because if the share goes below the level of Rs. 2920, it is safe to exit the trade.

 

Hence, if we wish to become a successful trader then we’ll have to carry-out a proper step-by-step analysis before trading. As you know we have an app called Aryaamoney. So in that after the Gateway to Wealth program, if you subscribe to our Smart Investor program then with that you get a special counselling session as well as you get a supporting tool along with it for 2 months. So that even after the course, you can successfully trade in the market. Thus, make sure you subscribe the Smart Investor training program soon.

 

Until our next blog…

 

Happy Trading, Happy Investing!!!

 

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