Query : I have bought the stock "A" in futures. Now the price is falling. What to do? Can I hold it?
Answer : Knowing the difference between investor and trader is important. Investor build his wealth over time holding the stocks, mutual funds and bonds. Where as trader makes money using the movements in market in short duration. One should know clearly whether he is a trader or investor. A person "X" buys a stock "A" and plan to sell when price reaches 100rs. The price reached 99rs then started to fall. "X" didnt sell his stock "A". He was waiting for the price to reach 100. If the person "A" bought the stock "X" in futures, he should have used trail stop and booked profit. Instead if he didnt use trail stop or stop, then he himself get confused whether he is a trader or investor. I have seen many people having this mindset. They enter in day trade, instead of closing the trade at the end of the day, they carry it forward and make it as swing trade. And swing traders make their trades as investment. Day trade, swing trade and investment have different entry, exit, stoploss and duration. Know this difference before trading/investing.
Answer : Knowing the difference between investor and trader is important. Investor build his wealth over time holding the stocks, mutual funds and bonds. Where as trader makes money using the movements in market in short duration. One should know clearly whether he is a trader or investor. A person "X" buys a stock "A" and plan to sell when price reaches 100rs. The price reached 99rs then started to fall. "X" didnt sell his stock "A". He was waiting for the price to reach 100. If the person "A" bought the stock "X" in futures, he should have used trail stop and booked profit. Instead if he didnt use trail stop or stop, then he himself get confused whether he is a trader or investor. I have seen many people having this mindset. They enter in day trade, instead of closing the trade at the end of the day, they carry it forward and make it as swing trade. And swing traders make their trades as investment. Day trade, swing trade and investment have different entry, exit, stoploss and duration. Know this difference before trading/investing.
