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I am an investor through mutual funds. Can I shift to trading?
Trading is for a different profile. One has to be with the market and move with it to profit from it. Small mistakes can cause great damage. Mutual funds are a great vehicle to travel if you are looking at slow and steady growth over a period of time. However one can gain good returns from the market by trading, but it takes discipline for it. If you have this in you then you should allocate a small portion of your portfolio and get it a shot
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I have a trading system in place. How do I make sure that this is suitable for me?
Before one starts to use a system it has to be completely put to test. At Trade Algorithm we have created a system after many years of back testing. Further our system aids implementation which is a key to success. If your system falls into this category then you have a winner.
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When I see the TV, I see a lot of analyst talking about various levels in the market and each one is different in his/her views. How do I know which is right?
The market is truly surviving only because there are multitudes of views. If everyone takes the same view then there is no market. With regards to knowing which is right or in other words you want to know which is the right technical tool, it is best that you follow your own tools. We do not know how other technicians are basing their views from. Technical analysis is not rocket science. It is easy to learn and implement. If you know basic mathematics you can do it. But what differentiates from knowing and being successful with it, depends upon your penchant with the market. Playing on the same wicket, one scores a century while many other batsmen fail.
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What is a best trading strategy?
There is nothing called a best strategy. A best strategy is the one which lets you to be in the market, survive and make money. In other words what you think is the best strategy you should test it before implementing it. However there are some safe strategies that one can follow. Whenever you enter a trade you should place your stop loss. If you think the stop loss is beyond your limits, then you should not take the trade or simple hedge your trade. But the key here is to know the worst case scenario. Our trading platform follows this strictly and this is one of the reasons for our success.
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What is your reading of the market for 2014?
In a lot of ways the character of the market has changed. This is evident from the way the markets behaved in 2013. This trend is likely to continue in 2014. Lot of events will drive the market. Key events are elections, FII money flow, Fiscal deficit, inflation to name a few. Right now the market is at a crossroads. Traders has to be cautious to ride this market. While plenty of opportunities are likely to present itself in the market in 2014, one has to clearly understand the nature of the market and get in tune with it. A combination of fundamental and technical analysis will help a trader in a long way. Please read our latest newsletter for complete details.
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