Investing systematically is akin to managing your daily life responsibilities. Just as you follow certain dos and don’ts in your routine, trading also demands a set of guidelines for a smoother journey. We’ve compiled a list of these dos and don’ts that will help you navigate the exciting world of trading confidently and efficiently.
Dos of Trading
1. Beware of Assured Returns
The allure of quick money can cloud sound financial judgment. Flashy schemes and unrealistic promises might catch your attention, but remember, there’s no shortcut to wealth. Building financial success takes time and patience. Refrain from being swayed by guaranteed assured returns or extravagant profits that seem too good to be true.
2. Review and Settle Your Trading Account
Regularly review and settle your trading account. Opt for monthly or quarterly settlements. This helps you:
- Keep track of your funds and securities.
- Prevent unauthorised transactions.
- Ensure no idle funds or securities are left with your broker.
- Address any discrepancies promptly by informing your broker.
3. Keep Your Contact Details Updated
Provide your email and mobile number when opening a trading account. If these details change, update your broker. Regular communication ensures you receive vital updates. If messages from your broker or exchange stop coming, notify them immediately.
4. Opt for Frequent Settlement of Accounts
If you maintain a running account, ensure it’s settled and receive your account statement within 90 days. The exchange might not accept claims after this period. Stay vigilant to protect your interests.
5. Ensure Payouts Reach Your Registered Bank Account
After raising a payout request, verify that funds are credited to your registered bank account within 1 day. Confirm that the correct bank account received the funds.
6. Understand the Complaint Redressal Process
Submit a written complaint to your broker, sub-broker, and SEBI in case of disputes. Address disputes with sub-brokers by informing your primary broker within 6 months.
7. Stay Informed About Regulations
Keep up-to-date with rules, regulations, and circulars issued by stock exchanges and SEBI. This knowledge simplifies your transactions and safeguards your interests.
8. Monitor Your Portfolio
Regularly track your investments and their market prices as reflected in your portfolio. Being aware of returns and market movements helps you make informed decisions.
Don’ts of Trading
1. Avoid Unauthorized Transactions
Only transact with SEBI-registered brokers and entities to avoid fraudulent schemes. Always verify the SEBI registration number before dealing.
2. Don’t Ignore Communications
Never disregard emails or SMS from your broker or the exchange regarding your trades. Cross-verify these messages with your Contract Notes or Account Ledger. Report any discrepancies promptly.
3. Protect Your Digital Credentials
Keep your net banking credentials and passwords private. Sharing them compromises your account security. Also, avoid sharing OTPs to prevent falling victim to fraud.
4. Don’t Transfer Funds to Unregistered Accounts
Only transfer funds to SEBI-registered broker accounts for trading or investing purposes. This safeguards you from falling prey to fraudsters.
5. Don’t Blindly Follow Investment Advice
Exercise caution when acting on investment advice from various sources. Conduct thorough research on companies, their financial status, growth potential, and other relevant factors before investing in securities.
Achieving your financial goals demands more than just research and patience. Adhering to these dos and don’ts is equally crucial for successful trades. While this list offers a guide, remember that experience will teach you more lessons as you embark on your investment journey. Armed with these principles, you’re ready to invest wisely and navigate the complexities of trading.