Zebu blog

Tag: trader mindset

  • Steps To Increase Your Trading Productivity

    Full-time traders who treat their work as a business are the ones who succeed. But the trading business can get very lonely very quickly. This might psychologically hinder your productivity but there are a few steps you can take to drastically improve your trading productivity.

    Here are a few of them. But Before we get started on your journey to increase your trading productivity, we believe that you deserve one of the best trading accounts from one of the top brokers in share market.With Zebu, you get access to an extensive online trading platformwith which you can create the right trading system.

    The first step is to create alerts.

    Set price notifications based on what you’re looking for. Alerts allow you to be informed about price changes or other changes at a specific time of day without having to sit in front of your computer all day long. To make the most of the rest of the day, you can take a break from the computer and take in the latest market news. An investor’s ability to react quickly to market changes is helped by the timely distribution of alerts. Alerts have the potential to significantly boost output.

    Create a system for your job and keep to it.

    A person’s productivity is directly related to the amount of time spent working. As you trade the market, come up with a plan for yourself. You’ll be more motivated to work on improving your trading performance if you establish a system. Keeping to a routine you’ve established for yourself is the cherry on top. Instead of waiting for the market to shift in your favour, traders who focus on ethics and stick to a process are more likely to become more profitable in the long run.

    Examine your area of expertise

    Re-examine recent trades in your trading journal. It will assist you in refining your approach. You can get a sense of how successful your trades have been by going over your previous transactions and determining whether or not they were profitable. Is it better to hang on to the traded stock for a longer period of time or not? Will you make money or lose money? And there are many more questions you can answer by going over your previous trades. The present market trends might also be better understood by looking back at your trades. It’s essential to review your work to determine where you’re doing well and where you need to improve, as well as where you should focus your efforts in the future. Every great trader keeps a journal of their accomplishments.

    Fresh air is good for you.

    Taking a breath of fresh air might help you relax and improve your physical and emotional health. You’ll feel better about yourself, your lungs will be clearer, your immune system will be stronger, and you’ll have a calmer mindset, which is especially important for trading. Trading on the stock market puts traders under constant stress, therefore it’s critical that they take a break and get some fresh air to de-stress. Taking a break has been shown to enhance output.

    Take some time to unwind and do something you enjoy.

    Make an effort to engage in activities other than trading, such as listening to music, binge-watching your favourite television show, or even taking a walk by the ocean alone. Pre-market, market-time, and post-market analysis can take up to eight hours of a trader’s day, which can sometimes get boring. With such a demanding schedule, mental equilibrium is essential. It is important to take a break from work in order to maintain a healthy work-life balance. When traders relax, their energy system is rejuvenated and they are able to start fresh with their trading strategies, which increases their productivity.

    As one of the top brokers in share market, we believe that you deserve one of the best trading accounts that we have to offer, where you get access to an extensive online trading platform with which you can create the right trading system. Get in touch with us to know more.

  • The Basic Rules Of Position Sizing

    The Basic Rules Of Position Sizing
    Most successful traders, whether they trade the forex, index, equity, or commodities markets, vouch for the relevance of position sizing in their performance.

    And why shouldn’t they? Without proper position sizing strategies, you could be putting a large portion of your trading capital in danger. Finally, the higher the risk you incur in each trade, the more likely it is that your trading account will be closed.

    While it is true that the trade might sometimes provide the much-desired large win, most skilled traders will tell you that it is advisable to limit your position size rather than raise your risk needlessly.

    Before you secure your trades with position sizing rules, ensure that you use the best broker for trading with the lowest brokerage on offer. Zebu empowers your online stock trading journey with a state-of-the-art trading platform as well.

    Let’s take a look at what position sizing is and why it’s so important, as well as the best position sizing tactics you’ll need to learn in order to enhance your trading.

    What exactly is position sizing?

    Setting the correct transaction size to buy or sell a certain instrument, or determining the Rupees amount that a trader will use to start a new trade, is the most basic definition of position sizing.

    It may appear easy, but it can be rather complex. Before you enter a trade, you should understand how much risk you are incurring and how it will affect your trading account.

    Furthermore, traders must regularly review their positions to ensure that everything is under control. Keep in mind that markets move swiftly! Furthermore, traders must keep margin requirements and margin stop out levels in mind.

    What is the significance of position sizing?

    As you can expect, opening positions with arbitrary position sizes or based on gut instinct will result in disaster. Position sizing is concerned with avoiding excessive losses. If you have a good risk management strategy and stick to it, you are unlikely to lose a large amount of your cash on a single trade. It will also provide you with an opportunity to retain your focus on your account as a whole and all your open positions. It is especially common for short-term traders who must react rapidly to new developments to lose oversight and forget how much risk they already have running before opening fresh positions. This is why it is so important: a successful trader is also a good risk manager.

    However, position sizing is about more than just avoiding excessive losses. It also provides you with the opportunity to improve your performance. A risk-averse trader who is only ready to risk a small fraction of his capital must realise that he will never generate significant returns. As you can see, position sizing is all about striking the appropriate balance – allowing yourself to maximise profits while avoiding excessive losses.

    Proper position sizing along with profit-taking tactics can assist traders in developing the optimal strategy for entering and leaving all trades.

    How do you calculate the size of your position?
    Let’s have a look at a handful of popular position sizing approaches you can use to improve your trading and make better use of position size.

    Position sizing strategies that work well

    1. Fixed rupee value

    The simplest method to include position sizing into your trading strategy is to use a fixed Rupees amount. This may be especially useful for those who are new to trading or have a little quantity of capital. All you have to do is set aside a certain amount of money for each trade you make.

    For example, if you have Rs 10,000 in trading capital, you could want to set aside Rs 1,000 for each trade. That is, instead of investing the entire cash into one deal, you can divide it into ten.

    This instantly reduces the amount of risk you take with each trade. It will also aid in the preservation of your capital if the first few deals you make turn out to be losses.

    2. Fixed percentage

    The most often utilised position sizing approach by traders is a fixed percentage risk each trade. On each trade, you put a small portion of your total cash at risk.

    Depending on the financial asset you’re trading — for example, equity, metals, oil, or indices – most successful traders would agree that a 1 – 2 percent per trade risk is a decent starting point.

    If you employ the set % risk per trade strategy with a Rs 10,000 trading capital, you should only risk Rs 100 – Rs 200 per trade.

    The beautiful thing about this method is that it forces you to focus on the percentage risk rather than the monetary value. Then, as your capital rises from Rs 10,000 to Rs 20,000, your 1% risk every trade rises from Rs 100 to Rs 200. Similarly, if your capital falls, you still risk 1%, but it will be a smaller Rupees amount.

    If you don’t, you’ll quickly discover that the large risks you incur in each trade will quickly deplete your trading cash.

    3. Use of leverage

    While leverage is one of the primary draws for traders to the equity, index, and commodities markets, we all know that leverage can be a double-edged sword. It has the ability to amplify both successes and defeats.

    Many trading platforms give leverage ranging from 3:1, 5:1, 10:1, or even 20:1.

    However, when it comes to leverage, keep in mind that you do not have to employ the utmost level of leverage. Just because it’s on sale doesn’t mean you have to take advantage of it.

    It is preferable to utilise less leverage to ensure that you are limiting your risk exposure.

    If you use too much leverage, you increase your chances of experiencing a capital loss or a margin call if a trade goes against you.

    4. Kelly’s Criterion

    Let’s have a look at the Kelly Criterion formula:


    W − [(1-W)/R] = Kelly %


    It computes the percentage of your account you should put at risk (K per cent). It is equal to your trading strategy’s historical win % minus the inverse of the strategy win ratio divided by your profit/loss ratio.

    The proportion you receive from that equation represents the stance you should take. For example, if you get 0.05, you should risk 5% of your capital per trade.

    These are 4 of the very basic position sizing rules and points to keep in mind while trading. In a world where trading is one of the riskiest businesses to be in, following the rules of position sizing can drastically improve your risk management.

    As we mentioned before, we at Zebu offer the lowest brokeragefor trading and, as a result, have emerged at as one of the best brokers for trading. Take your online stock trading to the next level with us – please get in touch with us to know more.

  • The Art Of Trading With A Small Capital

    Every trader would love to trade a well-funded trading account – with a minimum balance of INR 10,00,000 – but only a small percentage of us are able to do so. Most traders, especially those who are starting their trading careers, start with a small account.

    Trading with a limited account requires tight risk management and money management due to the lack of a cushion for mistakes or unexpected losses. For example, if a trading account only covers its minimum margin by Rs 20,000 and suffers a Rs 30,000 loss, the account will become untradeable until more funds are deposited.

    When it comes to online stock trading with a smaller capital, you need the best trading platform to back up your trading decisions. As one of the best share market brokers, we have created an online platform that is fully loaded with indicators, scanners and other tools to make trading easy.

    Here are some pointers for people with a modest trading account.

    The Constraints of a Small Account

    Trading with a small account is far more difficult than trading with a large account. Large accounts are protected against mistakes, unexpected losing streaks, and even bad traders, but small accounts do not have this protection.

    Even if you can afford losing streaks, trading with a small account has psychological concerns that make it difficult to trade well. For example, if a trader knows that they can only afford one loss in their trades, their account can be untradeable (due to a lack of needed margin), and the pressure to make a profitable trade is great.

    There are also differences in what a small-account trader is legally permitted to do. Large accounts can trade every available market, however, small accounts may only be allowed to trade specific markets in specific ways.

    Large accounts permit more flexible trading, such as several contracts and short positions, whereas small accounts may be restricted to long positions that can be covered with cash.

    Here’s our advice

    With all of the difficulties, it might appear that trading a small account profitably is impossible. However, this is not the case, and many traders, including experienced traders, trade small accounts profitably.

    Using Leverage in Trading
    Trading with leverage gives traders the opportunity to make upto 4X in profits for the trades they are right about. When day trading individual stocks, for example, you can normally trade up to four times the amount of funds in your account.

    Trading the same underlying stock in the options requires only about 15% of the trade’s value in cash.

    Trade with Caution

    Traders with well-funded accounts can afford to take high-risk bets, such as those with substantial stop losses in relation to their targets. Small-account traders must be extra cautious, ensuring that their risk-to-reward and win-to-loss ratios are calculated and used effectively.

    Follow the 1 per cent risk rule

    Trading with the 1% risk rule gives a small account the same cushion (against mistakes and unexpected losses) as a large account. Because it is a very successful risk management approach, many expert traders adhere to the 1% risk rule regardless of the size of their trading accounts.

    In conclusion

    Some traders are sure that trading accounts with insufficient capital cannot be profitable. This assertion is false. Small trading accounts may be more difficult to trade successfully, but if done right, there is no reason why they cannot be profitable.

    Small account traders can make a solid livelihood from trading, but they must manage the stress that is often associated with undercapitalization. The biggest focus should be on risk management and its strategies, especially the 1 per cent risk rule. With these considerations in mind, you may be able to grow your capital considerably.

    Profitable trading is one approach to grow a modest account, but if you’re conservative and follow the 1 per cent risk limit, the growth may be slower than you’d want. You could pursue higher risk/higher return transactions, but this exposes you to the chance of losing your entire account. Many traders with a small account may discover that they require additional sources of income, such as a day job, in order to substantially increase capital.

    When it comes to online stock trading and growing your trading account, another important aspect for you to consider is the shar market brokers you trust. At Zebu, we offer the best trading platform that is packed with features that you will help you make better trading decisions. If you would like to know more, please get in touch with us now.

  • Are You A System or Discretionary Trader?

    Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

    One of the decisions that new traders must make is whether to be a discretionary or a system trader. Discretionary trading is trading that is based on a decision. Based on current market conditions, the trader determines which deals to execute. System trading, on the other hand, is based on rules. The trading system determines which deals to execute; current market conditions are irrelevant. Discretionary and system trading can both be profitable. That is, the decision should be made based on the trader’s personality. Some traders may immediately determine which kind of trading is best for them; others may need to try both sorts before deciding. Whether you are a system trader or a discretionary trader, we provide you with the best trading accounts to choose from. As one of the top brokers in share market, we provide one of the lowest brokerage fees to help you make as many trades as you would like for the day.

    The Benefits and Drawbacks of Discretionary Trading The trader picks the transactions to make based on the information available at the moment in discretionary trading. A discretionary trader can (and should) nonetheless stick to a trading plan with well-defined trading guidelines. They will use their discretion in accepting the trade and managing it. A discretionary trader, for example, may study their charts and discover that all of their requirements for a long trade have been met. Nonetheless, they may decline to make the trade since the volatility for the day is too low, and so the price is unlikely to reach the profit target for the trade. The benefit of discretionary trading is that it is responsive to market situations. You may have an excellent trading system, but if you are aware that it performs poorly in particular market conditions, you can avoid those trades. Alternatively, if you see your strategy performs well in other conditions, you might increase your position size somewhat during such times to optimise gains. The disadvantage of a discretionary method is that many traders are prone to second-guessing themselves. They may be inept at determining when to trade and when not to trade; consequently, a more methodical approach would be preferable. Discretionary systems are vulnerable to trader psychology; being overly greedy or scared can quickly erode the profitability of a discretionary trading system.

    System Trading Benefits and Drawbacks The choice to make a trade in system trading is totally dependent on the trading system. System trading choices are final. They do not allow the dealer to decline a trade at his or her discretion. If the criteria are met, the trade is executed. A system trader may study their charts and discover that their trading system’s requirements for a short trade have been met. They will complete the transaction without any further deliberation. This is true even if their “gut” tells them it isn’t a good trade. System trading techniques can frequently be automated since the rules are so well defined that a program can carry them out on the trader’s behalf. Once a program has been built to determine when the requirements of a trading system have been completed, the program can make the trade without the trader’s involvement. This involves entry, management, and exit. The system trading approach has the advantage of being immune to the trader’s psychological whims. The system accepts all trades regardless of how the trader feels. The disadvantage is that systematic trading is not very adaptable. Trades are always accepted as long as the terms are met, even in less advantageous conditions. More rules can be introduced to the system to help overcome this problem, however, this often results in the loss of some winning trades.

    Discovering Your Personal Style Discretionary trading and system trading both aim to make money, but in slightly different ways. The two systems may even make many of the identical trades. Each will most likely be better suited to different types of traders. Discretionary trading is ideal for traders who desire complete control over their trading decisions, including entry, stop loss, and exit. Discretionary traders frequently feel uneasy about handing over total management of their trading to software. Discretionary trading is also for folks who just want to adjust their transactions to current market conditions. System trading, on the other hand, is ideal for traders that value speed, precision, and accuracy in their trading. System traders have no reservations about using a computer program to make trading choices for them. They may cherish the sense of diminished responsibility that this provides.

    Can You Use Both Methods? It is feasible to be a discretionary trader who employs system trading. However, it is not viable to be a system trader who also employs discretionary trading. A discretionary trader, for example, may use a trading system for their entries and take every deal that the system identifies. They can then manage and exit their deals at their leisure. A system trader does not have this option because they must adhere to their trading method exactly. If a system trader makes a decision without following the rules of their strategy, then he/she becomes a discretionary trader. All of your trades, whether you are a discretionary trader or a system trader, need to be complemented by the lowest brokerage and the best trading accounts you can find. As one of the top brokers in share market, we at Zebu offer low brokerage trading accounts and a high-end trading platform to execute your strategies. To know more, please get in touch with us now.