[00:02] real difference between trading and investing. After that we will see how to open an account and which broker to choose. After that we will look at four styles of trading and understand which one is best for beginners. And most importantly, [00:15] trading. And lastly, I will tell you one mandatory thing that every beginner must do before investing money in the market. This video is going to be a master class for anyone who wants to start trading. So bring a pen and paper. [00:29] Like the video, subscribe to the channel and fasten your seat belt. Because [music] you're watching the glory of cutter. And this is the premium side of I am also learning trading. There is no master or god in trading. [00:42] Whoever says that I am a master is either lying Whatever I am going to tell you in this video are frameworks, rules, learnings. There is no guarantee for anyone. The only thing that is guaranteed is that [00:56] if you skip all this and jump straight into trading with your real money, you will definitely sink. So let's get started. First of all, let's talk about the real difference between trading and investing. Look, trading and investing are not the same things. Let [01:09] me explain it to you in simple words. Investing means you become the owner of the company. When you buy Reliance shares, it means you are buying a small part of Reliance. If I talk about the time frame, then an investor invests for 5 years, 10 years, [01:22] 20 years. Takes calculated risks and studies the fundamentals of the stock. Like Revenue, Profit, Dept Management, Quality Extra. For this you must know how to do research and read balance sheets. And if I talk about money, you can [01:36] start investing from as little as ₹100. How? I have already or I have put its link in the description. In terms of frames, a trader takes trades for a few minutes, a few hours or a few weeks [01:48] and here you have to see daily charts. And according to me, trading tests your brain to its fullest limits. [02:00] And if I talk about money, then at the beginner level you should have a minimum amount of Rs 15,000 to 25,000. And this should be such an amount that even if it is withdrawn tomorrow, it should not make any difference to your life. So first decide whether [02:14] you want to become a trader or an investor. Both are possible but the learning time will be different. The we are going to focus on trading because I have on the channel. But if I talk about trading, there [02:31] Trading is not for everyone. If you want to know whether it is for you or not, then first try these three filters on yourself. Filter number one, capital tolerance. If the money you invest in trading becomes zero tomorrow morning, will you be able to sleep at night [02:46] ? If the answer is no, then this money is not trading money, you should not enter into trading. Trading money is something that does n't affect you emotionally or financially if it goes to zero. In the industry it is called risk [02:59] capital. For beginners, I would recommend that it should not exceed 5 to 10% of your total savings. That is, suppose if you have ₹12 lakh then you suppose if you have ₹12 lakh then you [03:11] time commitment. It takes a minimum of 6 months to 2 years to become a profitable trader from a beginner. Daily minimum you will have to spend 2 to 3 hours studying charts and observing the market. Just or a doctor takes time and fees , becoming a trader will also take [03:26] both time and money. The only difference is that there you used to give money and time to the college. Here you will have to give time and money to the market. After that comes filter number three, psychology. 70% of the game in trading is psychological. You have to [03:40] 70% of the game in trading is psychological. You have to do this well then you can become a good trader. So these three filters are [03:53] capital, time and temperament. Honestly ask yourself this question first. If the answer is yes, that I can bear it, I can do it , then only move ahead. Otherwise leave this video here and go away. And come back when all three of these are yes. Now let us [04:07] understand how to setup your account. First of all, understand that Demat account and trading account are two different things and you need both. Consider the demat account as basically your locker. Shares are [04:19] And this trading account is a tool through which you place buy and sell orders. open an account with a broker, he opens both the accounts together. For any beginner, I would recommend Zerodha or Gro, both have a lot of [04:33] simplicity. The charges are very low and the interface is very clean. And if , what are their fees, what does their interface look like, then you I will put the link in the description after this video. You must go and see him. And [04:48] while choosing a broker, definitely check the hidden charges. all the people who are new to trading just think that it is written there that the broker will charge ₹20 per trade, but in reality, five to six things are deducted on every trade. Let [05:02] example. When I started trading, I made an intraday trade of ₹10,000. Now, in this trade of Rs 10,000 that I had taken, Rs 20 was deducted from me as brokerage security transaction tax which was Rs 2.5. [05:16] After that there was GST at 18% on brokerage and transaction charges which was roughly around ₹3.65. So, if I tell you roughly, I lost ₹27 on a trade of ₹100. Now you people might be thinking that Vaibhav Bhai had said ₹20. ₹27 deducted. Why are you [05:29] doing so much mischief for ₹7? But let me explain one thing to you here. Look, the make profit in trading, then first of all you will have to make at least a bare minimum profit of ₹27. not a big deal either. But if I make ₹500 trades in a year, then I will have to [05:45] pay ₹13,500. Plus various hidden charges. So this money, ₹13,500, is deducted from your profit. This reduces your profits. That is why it is very important to compare these brokers. biggest red flags. If any broker comes to you and tells you that free [05:59] trading for ever, no hidden charges, then stop my brother. There must be some kind of business model of these brokers runs on commission. So how will they let you trade for free? Always check that you trade with a SEBI registered broker only. Otherwise there will be no [06:12] trace of your money. So, it may take You will [06:24] You will understand it easily. You will need Aadhar card, PAN card, bank details and your signature. Everything is completely digital. So you can do it comfortably thing which is trading styles. Now your account is open. Now an important [06:37] you want to choose. So there are four major styles in it. Number one intraday trading. Here you take a position early in the morning i.e. you take a trade and close it before 3:30 in the evening. Your entry will be on the same day. Your exit will happen on the same day [06:51] and your holding period, i.e. the period you stay in the trade, can be from a Now in this intraday trading, the broker gives you a leverage. This word leverage has to be understood well. What happens here? If you are [07:04] investing ₹10,000 from your pocket, then the broker gives you this permission i.e. gives you leverage that you can trade even with ₹50,000. And this is where your greed begins. In intraday trading, maximum money is made and maximum money [07:18] is lost. After that comes the second type, swing trade. Here your holding period can range from two days to two to three weeks. You catch the trend and ride it here. You your time commitment i.e. how long you will have to sit in front of the screen will [07:32] Otherwise, in intraday trading, you remain sitting the whole day as if you are a trading can be a decent option for beginners. After that, positional trading comes at number three. Here the holding period can range from two to three weeks [07:46] to a few months. Here you catch long term trends. The time commitment is the lowest because once you take a trade, you don't have to keep checking it again and again. And then at number four comes FAO i.e. Futures and Options. [08:00] But I will tell you in short in this video. First of all let me explain what futures are. Here you do not buy actual shares. You buy a contract here. explain with a simple example. You will understand it well. Suppose you [08:14] want one share of Reliance. Currently its price is ₹3000. But you don't have that much money. So what do you do? You sign a contract that I will buy Reliance shares after 1 month at the price of Rs 3000. That's all the paper you have. There is [08:28] no actual share. Now if after 1 month Reliance becomes ₹3200 then you can buy it for ₹3000 because you had signed the contract and if you want then you can immediately sell it for ₹3200. You will instantly make a profit of ₹200. [08:41] But if Reliance share goes down to ₹2800, then you will still have to buy it at ₹3000 because you had signed the contract and the loss you will incur will be on the share at ₹200. This is called futures. This means you are [08:56] betting on the price movement without actually buying shares. The options available now are a little different. Here you buy rights. There is no obligation on you. Meaning, use the contract only if you are getting profit. If there is any loss, you [09:10] can leave it. But to buy this right, you have to pay a small premium upfront which is non- refundable. If she goes, she goes. Now listen carefully. The real game of FNO is leverage. That means the broker system gives you a contract worth ₹3000 for [09:23] just ₹500 to ₹600. Meaning, with a small capital you can take a very big trade. You can also take a trade of ₹1 lakh by investing ₹10,000. It sounds like what a thing it is, brother. With small amounts of money, I can generate huge returns. But there [09:38] is a bitter truth here too. Just as leverage can 10x your profits, it can also 10x your losses. Suppose your stock falls by 2% then you may incur a loss of 20%. And sometimes it also happens that if the stock falls even by 5%, your entire capital gets wiped out [09:52] ₹10,000. So in this video we are not going to talk about fno. We are not even going to touch this because FAO is not made for beginners. FAO is simply like giving a 5 year old a Bgati to drive. So please don't do this. So [10:05] if I explain it to you logically, then first of all, catch the trends, learn and observe the market. [10:17] Now, if you are consistently profitable in swing trading for 6 months then only consider intraday. By then you will understand the rhythm of the market. Your emotional control will also develop. And this FNO, do not even touch it for a minimum of 2 years. [10:30] what are you talking about? Will it take 2 years to become a trader? So [music] brother let me tell you about a man whose name is Vijay Kedia. Do you know who this is? Multibagger investors who came from middle class background like you and me [10:45] but do you know how much their portfolio is worth today ? Worth Rs 1000 crore. He has a very famous and a famous framework. Always remember what is called a smile. Small in size, Medium in experience, Large in ambition and Extra large [10:59] in market potential. He too has And Rakesh Jhunjhunwala, whom people call the Big Ball of India. [11:11] He started with Rs 5000 in the 80s and today his portfolio is worth more than Rs 400 crore. He also started with positional and long term trading. His billion dollar net worth is not made from intraday trading. Till date, there has not been any [11:23] major success story from intraday trading in India. Remember this thing. These people who Remember this thing. These people who one becomes successful just by having Lamborghini and Jwagen. Now let us understand what [11:36] your trading strategy should be. This is where your technical zone will start. So listen carefully and take notes. First of all let me explain you one basic thing that what are indicators ? Because I can use this word [11:48] again and again in the video. You went to a doctor. Now the doctor does not diagnose you directly. He uses some tools first. Like checking fever with a thermometer. Blood pressure is checked with the BP machine. [12:02] indicators. These show the conditions inside your body from outside. The same thing happens in trading. The chart of the stock market is a body. What is happening inside him? That means how is the momentum? Mathematical formulas have been created to see when it is oversold, when it is overbought, when the trend [12:15] is strong or all these things. And these formulas are called technical indicators. The indicator is also very easy to use. You don't have to calculate it yourself. By pressing a button on the chart, [12:27] examples of one or two indicators. It is not very important right now but listen to it. It will be useful to you. RSI indicates whether the stock is rising or falling too much. Then there is the moving average which shows the overall trend of what is going on. There are [12:40] hundreds of such indicators. Everyone majors in something different. Now any beginner might hear that the more indicators the better. For doctor has 10 machines, his diagnosis will be better. But [12:53] in trading, the opposite happens. People put 15-20 indicators on the chart one by one like RSI, Fibonacci, Bullinger Bands. And then the chart looks as if Diwali lights are on. second indicator says to sell. The third indicator says wait. [13:06] confused. So before even touching these indicators, you have to learn one thing which is price action. This means in simple words you have to learn how to take decisions just by looking at price and volume without any indicators. Look, there [13:19] without any indicators. Look, there me explain this concept of support and resistance to you in very simple words. Suppose you have a ball in your hand and you are standing in a room. Now what will happen whenever you throw the ball on the floor [13:32] ? The ball will bounce down on the floor and come back up. So what did Floor do here? Did not let the ball fall. This is called support. This is an invisible floor that prevents the stock price from falling further. Now suppose [13:45] you throw the same ball up towards the ceiling, what will happen? After a limit, the ball will hit the ceiling and come back down. Right? So the roof did not allow him to go up. This is called resistance. This is an invisible ceiling which does not allow the stock price to go up. [13:58] Now if I talk technically, support is that price level from where a stock bounces up again and again. That is, the stock reaches that level while falling that this stock has become very cheap, it should be bought and the stock goes up again [14:13] and this resistance is such that suppose the stock reaches that level while rising and the sellers get activated there. They say that brother, we have made a and because of that the stock comes down again. Now let us understand how to identify support and resistance [14:26] ? So you just Now on this chart, identify where the price has reacted at the same level two to three times. Now draw a horizontal line there. [14:39] Now understand what is the practical use of this support and resistance thing. You have to buy at support and sell at resistance. for a beginner. If you understand it further, you will learn many new things. [14:53] So after that the second concept comes trend identification. There are three types of trends, meaning the direction in which the stock is moving. Up trend, down trend and sideways. Up trend means higher highs and higher lows. Like [15:07] this chart may be visible on your screen right now. Look here there are higher highs and higher lows. Meaning the next high is higher than the previous high and the next low is higher than the previous low. This means that every new peak of the stock is above the previous peak and every new bottom is above the previous bottom. That means it [15:22] appears as if the stock is climbing a straight ladder. Sometimes it goes two steps up and sometimes it comes down one step, but the overall direction is upwards. Now comes the down trend which is exactly the opposite of this. That is, lower [15:35] highs and lower lows. Now here you see the stock as if it is coming down the ladder. It bounces up a little bit at times but its overall direction, which you can see on the screen, is going downwards. And lastly comes [15:47] sideways, meaning no direction is clear here. The stock is moving in a range. Sometimes it goes up, sometimes it comes down. But it is neither going up nor coming down exactly. He's basically maintaining a horizontal type of line. [16:00] This is called the boring zone. You don't gain anything by trading here in normal cases. So for beginners I will give a simple rule that whenever you see an up trend then only trade. Do n't get involved in downtrends and sideways. The [16:13] reason is very simple. Let me explain it to you with an example that whenever you swim in a river, if you are swimming in the direction of the current then you find it easier to swim. Your effort is very less and you move forward very fast. But suppose you are [16:26] swimming against the current or flow, then same thing happens in trading also. Up trend means current is with you. Down trend means the current is against you. Beginners should always swim with the current. Once you [16:41] become a pro swimmer, you learn to swim with any type of current. But there is time for that. Then comes the third volume. Volume means how many shares were traded in a day? What was the total activity of buy and sell? Now [16:55] why is this volume so important? Because it gives you confirmation. You can understand it like this that someone tells you that he has won the lottery. I have got ₹1 crore. [music] ask him for his bank statement or ask him for his lottery ticket or [17:09] tell him where he came from. If he gives you proof then you will be confirmed that he has won. If he is not providing proof then you will know that he is just throwing it away. So this volume is also the same proof. The stock [17:21] price jumped without volume so it may just be a claim. There could be a fake move and he could fall back down quickly. But if the stock price has jumped and the volume is two to three times more than normal, then it is a confirmed [17:34] move. It's a genuine move. You've found a wave worth riding. So remember one simple rule. Be sure to check the volume with every price move. Do [17:46] you combine these three concepts, you will get a simple strategy which is very effective. Understand it step by step. Step number one: Identify a stock on the daily chart that is in a strong uptrend. Higher highs, higher lows [17:59] should be clearly visible. If you are confused then skip it. Find another stock. After that step number two is to catch the support level of that stock. Find the recent low from where the price bounced and that will be its support. After that, step number three is to catch its resistance level. [18:14] Find the recent high from where the price rejected it and that will be its resistance. Draw a horizontal line there. And step number four, now take entry and try. Now you can take the entry in three ways. The first method is to [18:27] buy support. And keep your stop loss a little lower. Meaning if the support is at 500 then buy between 500 and 505 and keep the stop loss at 490. This is called the buy the dip approach. After that comes the second method, buy on resistance breakout. [18:42] If the stock breaks the resistance and moves up and that too with volume, then buy it immediately. And place your stop loss slightly below the breakout level. This is called the by-the-strengths approach. And then comes the third method, [18:54] buy on retest after breakout. If the stock breaks the resistance, then comes back to test the same level and then bounces back, then buy here. This is the safest entry because here you get a confirmation that the earlier [19:07] resistance has become the current support and the market has respected it. After that comes step number five, decide the stop loss and target first. Take the trade later. But wait, maybe I said what is stop loss? He did not explain it to you. [19:19] I will explain it to you easily. Because this is the most important word in trading. Stop loss means a predetermined price level where you automatically exit the system. It is like an automatic braking system for a car. That is, suppose [19:32] any stock is falling and your stop loss is hit, then if that stock falls further, you will not suffer any further loss. You will stop right there. After that comes step number six. After entry, do n't check the chart every 5 minutes, my brother. If you are [19:45] trading on daily charts then check the end of the day once. What happens with frequent checking So this is my simple strategy. Sounds incredibly boring, but that's what makes consistent money. And at the same time, please please please [20:03] with the same strategy, only then you will know whether the strategy works or not or whether it suits you or not. Look at the behavior of these new traders who come. for 3 days. If it doesn't work after that, then try another one. He will also [20:16] try a third one. My brother, if you have any strategy, just try it. doesn't give you results. There should be a minimum of 30 to 50 trades for statistical significance. So be patient and focus on the top 200 to 300 stocks. [20:31] Nifty 100, Nifty Nex 50, choose stocks from here only. After that we come to the next section which is risk management. This is the section that 90% of beginners skip because they think, yuck, what's the point of [20:43] I have a simple line for beginners, always remember that risk management is more important than strategy. that risk management is more important than strategy. Why don't you use the best strategy in the world? If your risk management is poor, you will [20:57] sink. So there are some simple rules of risk management. Rule number one is position sizing which includes a rule of 1 to 2%. This rule is very simple. Your loss in one trade should not exceed 2% of your total capital. Now let me make one thing clear to you here. [21:10] Loss and investment are two different things. Investment means how much money did you invest? Loss means how much money you lost if the trade went wrong. Let me explain this to you with an example. If you have a capital of ₹1 lakh, then a [21:23] If you have a capital of ₹1 lakh, then a loss of 2% means a maximum loss of ₹2,000. So suppose you saw a stock of ₹500 and you placed a stop loss of ₹490 there. Meaning, even if you incur a loss on the share, the maximum loss will be ₹10. So now here you have to [21:36] find out the quantities. Loss of ₹2000 / ₹10 which gives me 200 shares. But wait a minute. 200 shares * ₹500 which was the value of the share that gives me ₹1 lakh. Here [21:48] your entire capital will be lost in just one trade. This is not right. Right? So this practical rule is very important. Invest a maximum of 25% capital in a single trade. That means approximately 25% of ₹1 lakh is ₹25,000. This 25% I am talking about as a maximum. If I [22:01] say recommended, it would be only 5 to 10%. So if I talk about this ₹25,000, then I can buy at least 50 stocks for ₹500. So your final position will be 50 shares into ₹500 which equals to ₹25,000 that we had invested. [22:15] Your stop loss there was ₹490. So if any of your moves goes wrong then you will suffer a loss of ₹10 which gives me 10 * 50 which is a loss of ₹500. So your loss on your ₹1 lakh is only 0.5%. This is called safe trading. This simple maths that [22:30] I showed you, you should remember it at the tip of your tongue and you should know how to do it. But even if you don't know, leave it. Remember two simple rules. The first loss should never exceed 2% of the capital. And secondly, investment in one trade should never [22:42] exceed 25% of the capital. Trade within these two rules no matter what happens. After that comes rule number two, stop loss is non-negotiable. What is stop loss? You have already understood this. Now understand its three important [22:56] rules also. First rule, decide the stop loss before entry. where you want to place the stop loss. After that comes the second rule, set the stop loss system. Do n't set your mind. Do n't say like this that brother, if it goes below this then I will [23:10] sell it. Learn how to set it up in the system. What happens is that this mental stop just place a stop loss in your mind and if the stock reaches that level, then your mind will start cooking up new stories. Like I'll stay a little longer. [23:24] Maybe it will bounce from this or it will not be right to leave now. So much of my money will be wasted. It's better I stop. Maybe it will go up. So because of emotions your logic gets lost. That's why set actual stop loss in the broker app. [23:36] After that comes the third rule that is to keep the stop loss at a logical level and not at any random place. I'll put it somewhere. This method is very wrong. Should not be kept at random places. The stop loss should be placed below the support or [23:49] below the recent swing low. Now if the stock falls below that level then get out of there without any hesitation. And the most important thing is that many beginner traders make the mistake of making a small loss into a big one. Just think about [24:01] loss of Rs 500 and you do not have the courage to accept it, then you Now again a loss of Rs 500 becomes Rs 5000. Now it becomes more difficult for you to get out. So you think, no brother, I will wait and recover my ₹5,000. In no time, [24:15] that loss of ₹5,000 becomes a loss of ₹1,000. what does a trader think, no brother, I do not want to incur a loss of ₹15,000. I cannot lose so much money in one day. All my profits of all these days are gone. [24:28] in this trade. Maybe we can move forward. Maybe it will go up. Maybe he will give what do you become here? You transform from a trader to an investor. You think it will go up in a couple of weeks. So my brother, this decision of yours to become an investor is [24:42] not taken when you are in loss. If you had accepted that loss of Rs 500, you would not have suffered this loss of Rs 15,000. even recovered it in the next few trades. But what do you do most of the time? You can turn a small wrong [24:56] trade into such a big mistake that it becomes difficult for you to recover. That is why I say that this stop loss should be non-negotiable and whatever your loss is, keep it small so that your recovery happens quickly. Now, [25:08] rule number three will teach you how much loss to keep, which is risk reward ratio. See, in every trade your potential profit should be at least twice the potential loss. If I look at ideal cases, it should be three times but at least it should be two times. [25:22] Now first understand what does this risk reward mean? Risk means loss up to your stop loss and reward means profit up to your target. The ratio of these two is called the risk reward ratio. Now let me explain this to you with an example. [25:35] Suppose you bought a stock at ₹500 and your stop loss was at ₹490. Meaning you had a risk of ₹10 there, so even if there was a loss, it would have been a loss of ₹10 and the target you set was at ₹520. Meaning [25:48] you could have made a profit of ₹20. So here this ratio comes out to be 1:2 i.e. 1:2 risk reward ratio. Now why is this ratio so high? I will explain maths to you in such a way that you will never forget it. Suppose you make 100 trades. [26:01] Ok? Your success rate is exactly 50-50%. That means 50 of your trades turn out to be correct and 50 of your trades turn out to be wrong. And the real world performance of an average trader is also around this. So in the first scenario, if your risk reward [26:14] ratio is 1:2, then you will lose ₹1 on every wrong trade. But you will make a profit of ₹2 on every correct trade. Now suppose your 50 trades were correct then 50 trades * profit of ₹2 gives us profit of ₹100. And [26:27] suppose 50% of your trades were wrong i.e. 50 trades were wrong then a loss of 50 * ₹1 gives us a loss of ₹50. That means the net profit that gives us is 100 - 50 = ₹50. So you are [26:40] profitable even at 50% accuracy just because of this risk reward ratio. You should take another scenario. So let's say your risk reward ratio is 1:1. This means that you will lose ₹1 on every wrong trade and you will make a profit of ₹1 on every correct trade. And let's [26:52] assume the accuracy is also 50%. That means you will make a profit of ₹50 on 50 correct trades. You will lose ₹50 on 50 wrong trades. So whatever your net result will be, it will be zero. So even after trading for the whole year, you will remain the same. All your hard work will go in [27:06] trading never comes with 100% accuracy. It just comes from actual simple math. And let me tell you one important thing. Even the pro traders sitting on Wall Street who run hatch funds do not have a success rate more than 50 to [27:19] 60%. But still how do they make crores of rupees? Because of keeping their risk reward ratio right. They make big profits in the right trades and encounter small losses in the wrong trades. So keep one simple rule. [27:32] So keep one simple rule. at least twice the potential loss. If it is not there then do not take the trade. Skipping it. Next time you will get a better opportunity. After that comes [27:45] rule number four, daily loss limit. Remember one simple rule. If there are three executive losses in a day or if the total daily loss touches 4 to 5%, then stop there. Don't trade after that. Turn off your phone, turn off the charts, [28:01] very easy to hear, but it is the most difficult to follow. Now rule for this which is called the concept of tilt. This term tilt originally comes from poker and casino. Now tilt means that mental state where [28:15] you are not able to take rational decisions. I react only to your emotions. The scenario that I told you a while ago, where a loss of ₹500 suddenly becomes ₹5,000, then you lose ₹15,000 to recover ₹5,000. That [28:27] recovery mode that you go into, you will have to come out of it logically. Otherwise you will end up losing more. You will keep taking trades one after the other emotionally and your losses will keep increasing. Now that is why remember this simple rule, if you suffer [28:41] three losses or lose 4 to 5% of your capital, then end the game for that day and do nothing after that. After that I have to come back after taking a walk. Have to sit fresh the next day. Then comes rule number five, capital allocation. This is the last rule but a [28:57] very important rule. Capital allocation means how do you distribute your money ? So the first part of this is that never invest the entire capital in one trade. In the rule of position sizing that I told you, we had [29:09] seen that maximum 25% of your capital should be invested in one trade. If you have invested your entire ₹1 lakh in a single stock and by mistake that stock goes wrong or goes down, then you cannot do anything. Suppose you find some other good [29:23] stock, even then you will not have any money left because you had invested all ₹1 lakh in the pursuit of one good opportunity, the next 10 good opportunities are missed. After that comes the second part that never open more than three trades at a time. That [29:37] New traders have a common pattern. He sees a new opportunity in every stock. They feel that brother, this trade should also be taken. ? Invest in 10 different trades at a time. Now what happens [29:50] because there are 10 different trades open. So this concept that I am going to called diversification with in trading. What we understood about diversification in investing in the old videos is that you invest money in different sectors [30:04] , you invest money in different asset classes. But diversification in trading means not concentrating capital in one trade. Distribute it into two-three different trades. After that comes its third part [30:17] that never invest 100% of the capital in trading. I have told you this before also. You will have to keep 30 to 40% in cash. You will have to keep it so that you can use it later. Now there are two reasons for this. The first reason is that the [30:31] Sometimes the stock crashes, sometimes there is panic selling, sometimes you get good quality stocks at 20-30% cheaper rates. But if your entire capital is already invested in a trade then you cannot do anything. You just keep watching. [30:45] You have no cash left. After that the second region is survival and restart. Suppose you took a wrong trade. Your account dropped by 30%. That means from ₹1 lakh it came down to ₹70,000. Now if all your money is in trades and you are in loss then it will be [30:59] difficult for you to restart. But suppose you had ₹40,000 you can start from the beginning. So this cash gives you a second chance. Understand this stuff that cash is a trade too. Sitting and doing nothing is also a decision. [31:15] And sometimes that is the best decision. Look, what happened during the time of Adani and Hindenburg, a lot of people suffered losses. Those people also made the same mistake. What did he think that brother, money never gets lost in Adani. On the contrary, it is increasing. It is [31:27] money and put it there. But as soon as Hindenburg's research report came out, people came to know that there are allegations of stock manipulation against them. So in just one week that stock fell to half its value. The stock of Adani Total Gas had [31:41] fallen by 80%. That means it went straight from ₹100 to ₹20. Now those people who had invested there without placing a stop loss and had invested all their savings of 15-20 years, all their savings were lost. Now tell me, did he not have a strategy? He had a [31:54] not have risk management. Suppose if he had placed a stop loss at 10-15%, then only if he had used the concept of position sizing, literally 75% of his capital would still have been [32:06] safe. And if they had countered and balanced Adani's losses. Look, there is a simple rule in the stock market that the stock market never kills you. Your own mistakes kill you [32:21] learns from these mistakes is the one who stays in the stock market for a long time and makes the most money. Now let's move on to the next section which is psychology. So you learned the strategy. You understand risk management. The hardest thing you will do is test your own [32:34] mind because trading is 70% psychological. Strategy plays 20% and the remaining 10% is played by the market. But the most ironic thing is that people never pay attention to this 70% psychology game. I never [32:49] So there are three main psychological enemies of trading. The first enemy is FOMO, or Fear of Missing Out. There is a fear that brother might get lost somewhere. This is the most common me tell you a scenario which has happened to me also. I was busy at times. [33:05] I didn't look at the chart. Now a friend told me that brother, this stock has gone up by 5%. that brother, it has already climbed, so let me enter. In a hurry and panic, I entered there at a higher price and literally after 5 minutes the stock fell by 3%. [33:20] Because I jumped into that stock after hearing something from someone and mistakenly bought that stock at the top when people were starting to book profits and because of this I suffered a loss of 3% there. So just understand one thing here, [33:35] this is my personal opinion that missed opportunity is always better than bad entry. In the missed opportunity, I wish I had come and money was not involved. But your money is also lost in bad entry. One thing I learned over a period of time is that there will be a [33:48] lot of opportunities in the market. Such different blind opportunities will come. So missing an opportunity is not going to lead to anything big. After that Revenge Trading: I told you that people's ego gets hit and if they suffer a [34:01] loss of ₹500, they go to ₹5,000. Then we lose ₹1,000, we lose ₹1,000. This is not to be done. This is a complete psychological game. If you go to take revenge from the market, it will definitely humble you 100%. He will bring you to your knees. [34:14] So you can identify this simple thing with a trigger. Suppose after a loss you immediately feel like making another trade. If your hands start shaking, stop right there. After any loss, after any loss, keep a simple rule which I have [34:27] take a break of 1 hour. I will open that chart and see it. I just go for a walk. I listen to some nice music. One thing I've learned is that when you give your brain time to reset, you become more efficient at trading. After that [34:41] comes the third enemy, overconfidence after winning. Look, let me tell you one thing. There is a simple rule in trading. I won't even call it a rule. This is a normal common thing that happens to everyone. That is beginner's love. You may keep winning continuously in the first two-three trades. [34:54] ? A dopamine rush comes to the brain. You think, brother, what a genius I am. I have understood the market. Next, what do you do in big trades? You increase your price even more. And you don't place your stop loss or you [35:06] forget to place it or you place it so low that it gets stuck again. And what happens is also goes away and the extra amount also goes away. So whenever you get into a continuous streak, that is, you keep making profit profit profit, [35:21] remain calm for a while and after that, keep a simple rule that you have to maintain consistency in every trade, that is, every trade will be of the same size. I won't do anything up or down. If I have to invest, say, ₹2000 in each trade, then I will invest only ₹2000. I won't [35:33] wind strike, a lost strike , or anything else. I will also follow the same discipline Now after this comes your most important tool which must be with you throughout your trading [35:45] journey which is Trading Journal. Now this is a tool which is absolutely free. But literally, this self-learning part of yours will be automated to a great extent. Now what do you have to do in this Excel sheet? [35:58] A return record has to be maintained for each trade. Whether there is profit or loss. There must be a return record for everything. How to make this? It should be coming on your screen right now so that you can copy it exactly. It is not very difficult. [36:10] You can easily find all these metrics on your broker app. And I have just added some things here which will help you a lot in understanding yourself emotionally and psychologically. which will help you a lot in understanding yourself emotionally and psychologically. [36:23] ? Every trade has to be written down immediately after it is closed and not just written down. And then I just have to sit down and find patterns as to which setups I was winning consistently with or which strategies I was winning consistently with. [36:36] Which one was I losing? What emotions were going through my mind when I lost a lot of money on emotions. Now this data will be only for you. Now this data will be only for you. [36:49] data that you are creating for yourself, this journal that you are creating for yourself, will be your own personal one. What setups or strategies suit you based on your specific mistakes ? How is your temperament? You have to write all these things in this journal. [37:03] Look, these pro traders sit down every month and just tweaks to them. Over the years, these into even bigger profits. Now [37:16] after this let us understand the last section of this video and the most important section which is demo trading. Look, after watching this video you have gained immense knowledge are there like how to open a demat account, you will also know them. But [37:29] here is a mistake that 90% of you will make. That is, you will directly go and invest your real money. But my brother, please, I am telling you with folded hands, do please, I am telling you with folded hands, do [37:42] start with virtual trading or paper trading. Now stocks are real, the strategy you use will also be real. But the money will be in paper form i.e. virtual. So [37:54] in this paper trading, you can actually enter the real market by using fake money and actually study whether your skills or your strategy are working well or not. I would say beginners should start from here. [38:08] Minimum at least one and a half month, so at least you should start with demo trade or least you should start with demo trade or remain in the bank as it is. Apply it later when needed. If [38:21] you want its platform then the one I used earlier was called Trading is no need to take any subscription for this. Use the free one. It's very nice. Just go there and activate paper trading. Now how to activate it [38:35] get a 1-2 minute video. If I keep explaining in this video then this video will become even longer. And remember one thing in this, do not make the mistake that brother, since I have received an sit and take any random trade. If you take random trades then you will [38:50] not learn anything even after 100 trades. The whole point of demo trading or paper trading is to whole point of demo trading or paper trading is to financial loss. So whatever virtual capital you get, trade it [39:03] as if it is your own money. It is your hard earned money. Try make sure you also follow a journal discipline of paper trading. So all the best [39:15] I may have demotivated a lot of people with this video. But it is necessary for them. They will have to understand trading concepts. They will have to understand the seriousness of trading. Only then will he perform well in trading. If [39:29] a teacher comes and tells you that brother, no, it is very good, very good, go and invest the money, then you will spend all your savings like a blind person. I don't want to do this to you. That's why I kept this video so raw and honest. If you like this video [39:42] then please subscribe to the channel because it helps and motivates our entire team. you in the next video with another such interesting and valuable topic. me know in the comments below what you found best about the teaching style of this video. [39:57] you for the rest in the next video. Till then keep having , keep learning and as always, keep , keep learning and as always, keep inspiring.