Recently, across the board rally catapulted the benchmark index Sensex to the record 60,000 mark for the first time. It happened for the first time ever in the India stocks markets that India's benchmark equity index S&P BSE Sensex crossed the 60,000 points milestone. From hitting the 1,000-mark on July 25, 1990 to reaching the 60,000-mark for the first time on 24th Sept, 2021, it has been a historic and memorable journey for the benchmark index Sensex. It has taken a little over 31 years for the Sensex to traverse from 1,000 level to the famed 60,000 level.

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Now, keep all this in view, many people who are willing to invest in the markets, want to become a part of this growth story and deep dive into what all it takes to enter into market and what are the myths and facts around the stock market. In this article, Kapil Goenka, Founder of Eternity Financial Services, shares his knowledge on stock markets, busts myths on stocks markets and elaborates some facts as well:-

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"What is a Stock Market? Well, when we ask different people, we get different answers: Gamble, Casino, Speculation, Making money, Losing money and more. These are theMyths of the stock market. But the Fact of the stock market is: a. it is a balancing act between fear and greed. b. it is not about being right; it’s about trading right. c. let the market make the decisions, not your ego. d. it’s about making money much more often than losing money," says Kapil Goenka.

Elaborating on the rules to enter stock market, he adds, "Six rules to follow before you enter the stock market: 1. Make all your mistakes early in life. 2. Always make your living doing something you enjoy. 3. Be intellectually competitive. 4. Make good decisions even with incomplete information. 5. Always trust your intuition.6. Calculate the risk-reward ratio."

On trading lessons, Goenka says, "1. Cut your losses quickly. 2. Confirm your judgment before going all in. 3. Watch leading stocks for the best action. 4. Let profits ride until price action dictates otherwise. 5. But all time new highs. 6. Use pivot points to determine trends. 7. Control your emotions."

He further adds, "The difficulty in trading lies not in the concepts but in their application. Human emotion is both the source of opportunity in trading and the greatest challenge. When you succeed, it is because you have mastered it. Ignore it to your peril. It is not too difficult to learn what you do when trading. The hard part is to really apply these lessons in actual trading when money is moving in and out of your trading account."

Moreover, Goenka says, "The plan of trading must be sound enough and must win more often than it loses. To stick to it, a trader should be right perhaps as often as seven out of ten times. Stick to your own game. Don’t mix trading and investment; don’t let a trade turn into long term investment and don’t let an investment turn into a short term trade. Don’t trade all the time. No man can always have adequate reasons for buying or selling stocks daily. Play an intelligent play. It takes a man a long time to learn all the lessons of all his mistakes. They say there are two sides to everything. But there is only one side to the stock market; and it not the bull side or bear side, but the right side."

Also, he suggests, "A trader should not ignore general principles and must definitely control and limit his losses when he is wrong. Don’t trade out of season all the time. Play strictly according to your system based on study and experience. And when you know what not to do in order not to lose money, you began to learn what to do to make money. No diagnosis, no prognosis. No prognosis, no profit. A trader must learn the essential difference between betting on fluctuations and anticipating the inevitable advances and declines; between gambling and speculating."

"Do not fight the market. Fighting the market is not good for two reasons: First, you will lose money. How much you lose depends on how well you manage our money and control our risk. Second, fighting the market affects our judgment, and causes us to try to confirm that our judgment is correct. Some very high level market analysts will persist in fighting a trend in order to eventually be right. In some cases the “technical price” level is so far away that by the time the forecast is negated, the investor following the advice will have lost a large sum and missed a fine opportunity on the other side of the forecast!"

As per Goenka, some Rules of the trade are, "1. Do not trade in huge volumes which make your life miserable. 2. Have patience till the end of the day’s trading.3. Be prepared for losses but try to curtail losses by the application of Stop Loss. 4. Be content with profits in the range of 2-4%. Do not expect more than this level in every trade. 5. Never re-enter into the scrip you have already traded. 6. Never leave the trading terminal even for a moment, as opportunities will never recur in day trading as you desire. 7. Do not listen to others, do not look at others’ trades and do not discuss your trades with others. 8. Log out of the terminal when you have achieved your target gains. If you desire to win the world as a whole, certainly your pockets will have a big hole."

"Please remember that prevention is always better than cure; we believe that speculation is injurious to your pockets," he concludes.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)