New to Markets? A beginner's Guide to Investing.

1. Investing = Test Cricket
Trading = T20
What kind of player are you?
Investing v/s Trading

2. Can you play a Test Match like a
20-20?
When it comes to creating wealth we need to play to a plan
Sometimes we get waylaid by our emotions and do not play the
way we have planned. That’s the reason for loss and many
heartburns.
The following pages will teach you the different approaches to
creating wealth. And the importance of sticking to your
strategy.

3. Before going for a transaction ask this
very basic question
What type of a transaction is this?

4. Decide Before Ordering
Investments or Positional Trade or Intra-day
There are three basic strategies in the stock
market. It is important to know the right strategy
that suits you.

5. Investments are like a Test Match
• Duration ranges from few months to few years
• They are based on Fundamental factors
• Strategy is to BUY & HOLD till the theme & under
valuation persists
• Let long term remain long term and do not book short
term profits
• As they say, Rome was not built in a day

6. Positional Trades are like a One Day Match
• Duration could be overnight to a few days
• They are based on Technical factors
• May not be in sync with Fundamental factors
• Always make use of STOP-LOSS levels - Use Trailing Stop
Losses
• Should not be converted into Long-term Investments

7. Trailing Stop Loss
Trailing Stop Loss lets you continue to increase the stop to
take advantage of any profitable trade. Here till the stock is
below purchase price the original stop remains. As the price
increases the stop increases. Why book `10 profit when you
can make more?

8. Intra-day Trades are like 20-20
• Same day square-off
• They are based on Technical factors
• May not be in sync with Fundamental factors
• Always make use of STOP-LOSS levels
• Should not be converted to Positional Trades or
Investments

9. Intra-day Assumptions
With a reward risk ratio of 2:1, money can be made even
if one is right 40% of the time.

10. INVESTING v/s TRADING

11. The Golden Rule
Do not trade like an Investor or invest like a
Trader
 Trading and Investment are as different as TEST
MATCH & ONE DAY.
 One does not play a TEST MATCH like ONE DAY or ONE
DAY like a TEST MATCH. If one does, the team may
lose. The same is the case in Stock Markets.
 The rules of trading are different from that of
Investment.
 Hence, if one trades like an Investor or Invests like a
Trader it would result in loss.

12. Thank You!
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13. Disclaimer
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