To avoid losing all your principal in stock market like majority of the investors, please read these discipline guidelines carefully. For many, trading in stock market may be a FUN GAME, but for us, it is a serious business which involves real money, and we need to take utmost care of our hard-earned money.

What is Trading in stock market?

Trading means buying and selling of shares of listed companies within a day, few days, few weeks or few months, it is a buying & selling activity to earn profit within a short time frame.

What is Investing in stock market?

Investing means buying shares of a listed companies for long term period, time frame could be as long as 1 year, 5 years or more.

Our Focused Segment: We only trade in cash segment even though the stock is in Futures and Options.

Delivery or Intraday: Time frame of each trade is from few days to few months, though sometimes target could be achieved within a day.

Set Buy Stop: A specific price level at which a stock meets MIPA Strategy buy criteria. We suggest DO NOT buy the stock early – as it does not meet our criteria UNTIL it prints at the recommended price.

Focus List: Focus List is essentially our watch list; however, a specific buy price or pivot point for purchase has not yet been established.

Stop Loss Discipline

A member should strictly follow stop loss levels mentioned in the technical recommendation report, if the stop loss levels are not followed with discipline, there are higher chances of losing major part of the trading capital, it can be entire capital as well. If a member cannot follow this most important discipline, then we suggest to avoid subscribing to our services. Only increasing the number of subscribers is not our motto, we want to create a family of like-minded people who are disciplined to follow trading rules.

Buy Price levels:

If a member misses to buy our recommended stock, we strongly suggest not to chase and buy at levels where risk is more than reward. We suggest to keep your messaging app handy so that recommendation could be seen as soon as it is shared. Recommendations shall be shared during market hours and off market hours as well.

Sell Price Levels: Due to market volatility and/or other reasons, sometimes, selling price levels could be below or above target price levels. If the selling price is different than the recommended target price, members shall be informed about the same in advance or real time, because sometimes, selling price levels could be below or above target price levels.

Trailing Stop Loss: Members should strictly follow trailing stop loss levels once there is significant price movement from buying price. Example: If the stock has moved significantly in our direction, to ride the movement, trailing stop loss should be brought to either buying price or above so that gains should not get converted in a loss.

What if the stop loss is hit and then price goes in direction we wanted?

One: It is not going to be same case always, after stopping, stock can further go deep down, which can save major portion of the invested capital.

Two: That is part-n-parcel of the game, we suggest not to look at just a single trade, P&L calculation should be done monthly or quarterly to effectively understand the results.

Three: Better the risk reward ratio, best would be the results over a long period of time.

What if stock open gaps down skipping the stop loss?

In this case, we shall exit immediately or can wait for another immediate support/resistance if we can hold till then.

Capital Allocation: This depends upon the risk capacity of each investor. Below mentioned could be one way of trading with effective risk management.

Example:

Capital for Investment: Rs. 15,00,000/-

Maximum Position in each trade: 10% of total capital i.e., Rs. 1,50,000/-

Maximum Stop Loss: 7% i.e., Rs. 10,500/- (7% of Rs. 1.5 lakhs)

Hence, could be a bearable loss of 0.7% on total capital of Rs. 15,00,000/-

But, for a maximum 7% risk, our trade must have potential to gain around 14% or more reward.

In this way, if in some trades, risk is 3% on a trade, i.e., Rs. 4,500/- on Rs. 1.5 Lakhs, which would be about 0.3% bearable risk on total 15 lakhs capital.