InvestorQ : How do I put in place a practical methodology for the actual trading process?
Anushri Vasa made post

How do I put in place a practical methodology for the actual trading process?

Neelam Naik answered.
3 years ago

Apart from the discipline of stop loss and profit targets, there are a lot of specific things about trading that you need to consider. The during-trading methodology is a lot more complicated. It includes executing the trades, managing the risk of the trades and also keeping a tab of the news flows and charts. Constant vigil is at the core of this trading methodology. You not only need to track the news and the chart cues but also the announcement flows. You need a methodology for all three. Execution requires a clear cut methodology as to when you will place a market order and when you will place a limit order. Should you use IOC orders at all (when permitted)? This also includes whether your execution should be phased or whether it should be bunched. That depends on the market conditions. Secondly, risk management is a fairly complex task and entails managing both the apparent risk and the latent risk. Clear position limits are a must for managing risk during trading hours. Thirdly, there must be a clear methodology for tracking stocks during the trading hours. You need to have a methodology for getting technical alerts and news alerts for immediate action. Also corporate actions and announcements need to be tracked on a real time basis for a holistic view of trading. Trading is all about putting the processes in place. Once the methodology and process is in place, the rest will automatically follow.