To avoid losing all your principal in stock market like majority of the investors, please read these discipline guidelines carefully. Investing in stock market involves real money, and we need to take utmost care of our hard-earned money.

General Definition of Trading and Investing in Stock Market

 

What is Trading in stock market?

Broadly, trading in the stock market can be considered a form of investing. However, for clarity, trading specifically refers to the buying and selling of shares or stocks of listed companies within a short time frame, which could be a day, a few days, weeks, or months. The primary goal of trading is to earn a profit within this short period

What is Investing in stock market?

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

Mint Investing: Key Terms & Guidelines for Trading and Investing

 

The stock market offers both short-term and medium-to-long-term investment opportunities. Based on these opportunities, we provide tailored recommendations for buying or short-selling stocks. Below are the terms we use in our recommendations:

1. Buy – Only for Trading (Few Days to Few Weeks)
   Recommended for short-term trades.
2. Buy – Only for Investing (Few Weeks to Few Months)
   Suitable for medium-term investment opportunities.
3. Conditional Buy – Only for Trading (Few Days to Few Weeks)
   A purchase recommendation based on a specific price or price range that meets our criteria.
4. Short Sell – Only for Trading (Few Days to Few Weeks)
   Recommended for short-term trades.

 

General Guidelines for Recommendations

• Stocks should be purchased or short-sold at the suggested price.
• If you miss the opportunity to buy or short sell, avoid purchasing at higher or lowers levels where the risk may outweigh the reward.
• Use the Mint Investing App to receive real-time recommendations shared during market hours.

Special Note on Conditional Buy

For a “Conditional Buy,” wait for the stock to reach the specified price or range. Avoid purchasing early, as it may not align with the outlined requirements.

By adhering to these guidelines, you can make more informed and strategic investment decisions.

 

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 or stop loss could be hit within a day.

Stop Loss Discipline

This is the maximum risk suggested. To be strictly followed.

A member should strictly follow stop loss levels mentioned in our recommendation, if the stop loss levels are not followed with discipline, there are higher chances of losing major part of the investment capital, it can be entire capital as well. If a member cannot follow this most important discipline, then we suggest avoiding 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 investing rules.

Please Note: It is your responsibility to monitor Stop Loss.

Sell Price Levels:

If posted “Sell/Exit” the already bought long positions should be closed/exited now.

Buy To Cover:

If posted “Buy To cover” the already sold short positions should be closed/exited now.

Adjust Stop Loss: Members should strictly follow trailing stop loss levels once there is significant price movement from buying/short selling price.

Example: If the stock has moved significantly in our direction, to ride the momentum, trailing stop loss could be brought to entry price so that gains should not get converted in a loss.

GTT (Good Till Triggered) or GTC (Good Till Cancelled)

A GTT or GTC order is a type of stock market order that allows investors to place buy or sell orders that remain active until a specified price-based trigger condition is met

 

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

One: 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 trading/investing in stock market, 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, shall be exited immediately or can wait for another immediate support/resistance if we can hold till then as per one’s risk capacity.

App Features and their uses

1. Live Stream

The Live Stream section provides users with real-time updates and insights from the stock market. It includes:

• Live Recommendations: Instant alerts on buy, sell, or hold opportunities for stocks.
• Expert Commentary: Market analysis and trends shared to guide your decisions.
• Market News: Updates on key events impacting the market, such as economic reports, corporate announcements, or geopolitical developments.

This feature ensures users remain informed and can act quickly on time-sensitive opportunities.

2. Open Positions Tab

The Open Positions tab helps you monitor your active trades and investments with ease. It provides:

Detailed Position Overview: View your current stock holdings or trades, including Entry price, Last Traded Price, and profit/loss status.

3. Curated Focus List

The Curated Focus List offers a collection of carefully selected stocks, however, a specific buy price for purchase has not yet been established.

This list simplifies decision-making by narrowing your focus to the most promising opportunities.

4. Stock Analysis Tab

The Stock Analysis tab provides in-depth insights into individual stocks, empowering users to make data-driven informed decisions. It includes:

• Fundamental Analysis: Brief fundamental analysis about company and its business.
• Technical Analysis: Detailed Technical Analysis on why the stock was recommended.

This section is an essential tool for users who want a comprehensive view of a recommended stock.

4. Home Page

This centralized tab allows you to track all ongoing activities and updates in the App.

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

Example 1: (For Short Term Trading):

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.

Example 2: (For Medium Term Investing)

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

Maximum Position in each trade: 5% of total capital i.e., Rs. 75,000/-

Maximum Stop Loss: 15% i.e., Rs. 11,250/- (15% of Rs. 75,000)

Hence, could be a bearable loss of 0.75% on total capital of Rs. 15,00,000/-

But, for a maximum 15% risk, our trade must have potential to gain around 30% or more reward.

In this way, if in some trades, risk is 10% on a trade, i.e., Rs. 7,500/- on Rs. 75,000/-, which would be about 0.5% bearable risk on total 15 lakhs capital.

Liquidity:

Understanding the liquidity of a stock is crucial for planning position size in stock trading and investing. Simply put, liquidity can be calculated by multiplying the volume with the average stock price. Here’s how we prefer to calculate the liquidity of a stock:

Liquidity = 50-day average volume X Present day average price

For example, if the 50-day average volume is 5 million and the present-day average price is INR 100, then:

5000000 X INR 100 = INR 500 million or INR 50 crore

This calculation assists in planning position size effectively. We’ve categorized liquidity into ratings from A to D.

                1.            Liquidity Rating: A (Liquidity more than INR 100 crore)

                2.            Liquidity Rating: B (Liquidity between INR 50 crore and INR 100 crore)

                3.            Liquidity Rating: C (Liquidity between INR 25 crore to 50 crore)

                4.            Liquidity Rating: D (Liquidity below INR 25 crore)

Our recommendations will always have liquidity rating of a stock which could help you to plan your position size.

Ideal position size along with a stop loss can significantly reduce risk of major drawdown of overall portfolio.

We strongly recommend considering the liquidity of a stock when sizing your investment or trade positions.

THE IDEA IS TO STAY IN THE MARKET WITH SMALL LOSSES AND BIG GAINS

 

RESPECT RISK!