HOW TO FORM SIMPLE RULES IN TRADING ?

TRADE : Trade refers to buying and selling of goods and services for money or money worth . It involves transfer or exchange of goods and services for money or money worth . The manufacturer or producers produce the goods then moves on to the whole seller , then to retailer and finally to the ultimate consumer. Trade is essential for satisfaction of human wants. Trade is conducted not only for the sake of earning profits, it also provide service to the consumer. 

DEFINITION : " The economic function of trade is to buy goods in the place where they are extracted or manufactured and to direct them to place where they are required. "

                                                              According to Stephenson.

THERE ARE SOME SIMPLE RULES IN TRADING :

1. PLANNING : It is the pre-dicided planning done by the persons who are going to enter into a new market for trading purpose. Planning involves deciding in advance what to do, when to do it , where to do it , how to do it , and who is to do it. It involves determination of the objective to be achieved and selecting the right course of action to achieve the desired objectives. A plan is a future course of action and therefore, planning is based on forecasts or scientific estimates of future events. It involves taking decisions in advance of action. It helps us in knowing the information like why we are going to enter into trading and helps us in knowing the purpose of trading through which we can start our trade in the market.

2. NO DISCRIMINATION : There should not be any discrimination on the ground of age , education caste , creed , color , income etc . Every persons involved in trading activities should be given equal importance in the market. Every persons are free to give their opinion in the trading activities. Every person has enjoy the equal right and shares in the market .

3. CONSISTENCY : Every trader in the market involves in trading activity should fixed their risk bearing capacity so that their should not having to bear higher loss in the future . Therefore consistency will come in term of profit and loss in the trade in near future. Example - TATA STEEL AND HINDUSTAN UNILEVER .

4. BE HUMBLE AND DOWN TO EARTH : For every trader it is necessary that he should be very humble in their behaviour as it helps us in maintaining goodwill in the market atmosphere. And if he is opposite to this then there should be high loss in the trade.

5. DISCIPLINE : Discipline is very important element for every trading firms. Discipline helps us in running the trading activity smoothly and in systematic way. It enhanches the performance of the traders and helps in the development of the trade in the future course of action. It helps us in doing the work with perfection in creative and innovative way. 

6. CO-ORDINATION - There should be proper co-ordination amongst the parties involved in the trading activities. Co-ordination establishes a mutual relationship among the trading parties to work enthusiasly . Co-ordination is the orderly arrangement of group efforts to provide unity of action in pursuit of a common purpose.

7. BECOME UNEMOTIONAL ABOUT TRADE : In trading activity everything should be measured in terms of point so that you will remain away from emotions. There is a formal relationship between the parties involved in the trading activity. Everything done in the trade is so systematic and scientific way by adopting new marketing strategies and modern technology for trading.

8. BETTER DECISION MAKING : There should be better decision making in the trade by taking the opinions of all the members involved in the trade . A good decision hell's us in generating higher profit in the future . All the precautions and points should be taken so care while taking the decion for the trade expansion, vast market, advance technology etc.