Introduction – Trading Psychology

January 29, 2013
Trading Psychology

Nithin KamathHello Traders,

There are many characteristics and skills required to be successful trading markets. Understanding of Technical Analysis, Fundamental Analysis and the ability to spot a trend are a few common traits of winning traders. But what really sets the winners apart are two important ones, “discipline and emotional balance.”

Over the years of trading the markets I have read newsletters, blogs, and articles on trading psychology which have helped me improve my trading immensely especially when the chips were down. In this section I will be sharing with you such articles that can help you become much better traders.

Will mention the reference from where the article was taken in the introduction section on every blog.

 

Happy Trading,

 

Nithin Kamath

CEO @ Zerodha and partnering startups through Rainmatter to help grow and improve the capital market ecosystem in India. Love playing poker, basketball, and guitar. “You don't have to be a hero to accomplish great things---to compete. You can just be an ordinary chap, sufficiently motivated to reach challenging goals.” - Edmund Hillary

7 comments

  1. DR1056 says:

    Dear Zerodha
    What is the difference between equity share and futures when it comes to bonus.
    In case of equity shares held will increase proportionately. will the same rule apply to futures also? Recently LT gave 2:1 bonus. Now sun pharma book closure is on 31st july. will the 250 lot of sun pharma will become 500. if not what should investor do to protect his interest please explain

    • Zerodha says:

      In case there’s a bonus/split the Futures & Options price/market lot/strike price would automatically gets adjusted.
      The Exchange used an Adjustment Factor to arrive at the new price/market lot/strike price for the contract.
      a) How to determine the Adjustment Factor?
      Ans: In case the Bonus ratio is A:B, then the Adjustment Factor will be (A+B)/B. The bonus ratio for L&T was 1:2 (one share for every two shares held) and hence the Adjustment Factor was (1+2)/2 = 1.5
      b) How is the new Future price determined?
      Ans: New Future Price = Old Future Price/Adjustment Factor
      c) How is the new Future market lot determined?
      Ans: New Market Lot = Old Market lot * Adjustment Factor.
      d) How is the new Option Strike determined?
      Ans: New Option Strike = Old Option Strike/Adjustment Factor.
      e) How is the new Option market lot determined?
      Ans: New Option market lot = Old Option Market Lot * Adjustment Factor

  2. Sreejith says:

    Zerodha mobile platform is works in tab????????plz tell me

  3. devendras says:

    Hi nitin
    my question is when we buy shares/futures in multiple price (for ex. reliance Rs. 100, 101, 102) and we sell it entire shares/futures in one price whether that trade will be consider as one or multiple trades.

    • Nithin Kamath says:

      Devendra,

      We charge per executed order, so if you buy it in 3 orders, that would be Rs20 x 3 as brokerage and if you exit all of it in 1 trade that would mean Rs 20 x 1 as brokerage, so together it would be Rs 80 as brokerage.

      Cheers,

  4. GHANSHYAM says:

    SIR I HEAR ABOUT NEST TRADER COLUMN 1 1 1 OR 0 0 0 SHOW.
    111 FOR SELL AND 000 FOR BUY.
    EXPLAIN ABOUT THIS.
    AND
    WHAT SHOW INDICATOR COLUMN?
    I SHOW OTHER TERMINAL N T R IN INDICATOR,BUT MY TERMINAL NOT SHOWING THIS.

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