A successful Stocks and Commodities Trader

Successful trading comes from experience and experience comes from only after spending money and time in the Markets. A trader is considered only if he trades and makes money in bull or bear markets.

Proper analysis and strict financial discipline are the two important factors that are very crucial for a trader to be successful. Successful Traders have developed a good trading system after prolonged testing of the trading system.

 A trading system may be of any kind but over a period, it should show good results, irrespective of any Market. Until you design a trading system, try experimenting with your system till you are satisfied with the system. This is not going to be a easy process.

Once you have found a successful trading system that works for you, you need to test the system for number of times for Profits and losses before you use it in real time.

A trader you trades the markets without proper trading system is destined to lose. So, designing a trading system is the half way mark for a successful trading. The next part is financial discipline.

Financial discipline is nothing but executing your trades based only on your system with proper entry and exit levels. The loss from any trade should be less and the profit from the trade should be more.

Successful mastering of developing a trading system and following it with discipline would surely make a successful Trader.

Will This Growth Sustain forever?

The new Investors and younger generation of India and China feels that the economic growth of their countries are non stopple and the growth is going to be there for ever. May be this growth continue for another decade, but at one stage, any growth has to see a saturation.

Saturation will be followed by the period of negative growth. The economic cycle will always see a high and a bottom. May be the growth and slow growth time periods may differ, but that will happen.

After the World War, Japan concentrated more on their economic growth. So Japan attracted lot of foreign investments from all over the world and the Japanese invested in all countries. The growth was phenomenol since 1950 to 1990. Their Stock Markets peaked in 1989 when Nikkei was trading around 39000.

Since then, for the past 20 years, Nikkei crossed its all time high of 39000. Now it is trading around 10000. It is one fourth of its all time high of 39000. So, a generation on Investors has never seen the peak in Japan.

The same will happen to India or China in the future. People has to learn lessons from Japan.

Rich becomes richer, Poor becomes poorer

The year 2003 to 2008 saw massive growth in India and China. The GDPs of both these countries are growing more than 8 percent while other European and North American Countries are growing at zero percent rate.

Since 1998, India and China saw the growth of IT industry in their countries but the growth was higher in India than China. BPOs and KPOs business boomed in India since then.

The massive growth of IT, Telecom and BPOs in India has helped many middle class families boys and girls in India, particularly in South India, to earn a good salary which hitherto was not available to them.

These middle class families slowly lifted to the upper middle class family category because of the Income they got from these Industries.

At the same time, Chinese concentrated more on other sectors for their growth as they are good in English. So, the growth is even in China in all sectors and the salaries rose nominally for all class of people. Hence, the growth of the Chinese families were more or less homogenious.

But in India, the growth is concentrated more in select sectors of the Industry. So, the growth of the Indian families is not homogenious. Only a few section of the people, say 10% of the population, has enjoyed the Economic growth.

While India was growing one side, we saw farmes suicide in some parts of the Country because of the crop failures. Price rise of essential commodities has made the life’s of the weaker class very difficult.

So, the recent Economic growth is enjoyed only by few percentage of the population of the India.

I would not say it as a real Economic growth untill all sections of the society enjoys the fruits of growth.

Evils of Inflation and deflation

Let me explain the concept of Inflation and deflation in a simple manner. Inflation and deflation are the terms used to describe the state of a Economy.

Inflation is the word used during price rise of essential commodities. Inflation is nothing but, too much of money chasing too little goods. To put it simply, if there is too much of paper money and less quantity of goods are produced, then too much of paper money would chase too little goods which would automatically increase the price of the commodity.

Inflation occurs when there is more paper money and less end products. There is imbalance between the money printed and the goods produced during inflation. Inflation can be controlled by controlling the printed paper money or producing more of the goods.

The term deflation is used opposite to Inflation. Deflation is a period when too little money chases too many goods. Because of this, the price of the commodities starts falling which will put the producers to get a price lower than their production cost. This is also evil to the economy.

So continous fall or rise of prices would be seen as evil for the economy. Inflation and deflation can be controlled by the Government by increasing or decreasing the Interest rates or by controlling the printing of Currencies.

When there is blood in the streets, You buy property

There is a popular saying “ When there is blood in the Streets, You buy Property. In the Hollywood Movie ‘The Inside Man’ the sentence was used frequently to describe situation of Character in that Movie making money during world war.


The saying would surely fit for the Investments decisions. Whenever there is a decline in the price of the assets whether it is Stocks or Bullion or Real Estate, they are bound to come up from low levels. But it may not be immediately but surely it will rebound atleast after some time.


But the emotional setup of all Investors at that time would be biased towards panic. They will be following the herds. Herd Mentality would set in which would surely ensure the Investors not to take rational decisions.


But the history shows whenever there is panic in any Market that is the best buying opportunity and it is mostly missed by most Investors. Investment decisions should be taken in a particular asset when others are selling. This is called the contrarian thinking.


The best Investment chances came when everybody was in Panic about the particular Market. In future, we may see a panic situation in the any market. We should see that an Investment opportunity, instead of joining the herd.






The contrarian thinking says ‘you buy property when others are selling’.