Why This Is the Best Time to Trade Equities

Apurva Sheth

'I am new to trading. How should I start? Is this the right time to trade?'

'Markets are so volatile these days. Would trading now be profitable?'

'I am retired. Should I trade now?'

I hear these questions often, dear reader. The common thread is that many of our readers are new to trading, and they're sceptical. Some of them might have tried trading before and had a bitter experience. Once bitten twice shy, as they say. But if you're sitting among them on the fence, I strongly encourage you to go through rest of this letter. For today I will share four reasons, this is the best time to trade equities...

  1. Opportunities to learn
  2. One of the main reasons retail investors shy away and lose out is that they lack the knowledge required to win the game of trading. Let's say you are playing chess. To win the game, you need to know not only the rules but also strategies you can use to beat your opponent. The problem with retail traders is that they are neither completely aware of the rules of trading (risk management, position sizing) nor do they have proper knowledge of trading strategies (technical analysis, algorithms, futures, options).

    Over the last 20 years, Equitymaster has been empowering retail investors with its honest, credible, and reliable views on investing. Daily Profit Hunter (DPH), an independent research effort of Equitymaster, does the same in the field of trading. Through our newsletters, we educate our readers about the right way to trade. From trading psychology to risk management, our articles cover a wide range of topics. On our website, you can find articles on almost every topic that a new trader would require...and that too in a simple and easy to understand language. Learning has never been so fun and easy. Not to mention profitable!

  3. Tools to level the playing field
  4. Another reason retail traders have lost out is that they are trading against professionals who have access to the best trading tools and resources. Our aim at DPH is to empower you, the retail investor, with tools similar to what the professionals have at their disposal. Our mission is to level the playing field and give you an edge over the pros.

    Advanced Charts is a technical charting tool on our website that benefits lakhs of our readers. I believe it is one of the most user friendly tools available to traders. It has helped many of our readers take their trading to a whole new level.

    We know many of our readers are working professionals with limited time to keep a track of the markets. Our weekly market commentaries help them keep abreast to the latest happenings across the equity, currency, and commodity markets.

    Today more than ever, you have the tools to start trading equities.

  5. Plenty of opportunities to earn
  6. Most of the newcomers who write to me are interested in the current market situation. They want to know whether it's conducive for trading. Well, let me set this straight. If you wait for everything to be picture perfect before you trade, you will always be waiting. There will always be something of concern. And even when things look perfect, you can never be sure.

    Take the beginning of 2016 for example. Markets started the year on a terrible note. Indian markets dropped by more than 12% in the first two months of the year. It didn't look like an ideal time to trade. Yet, we had a positive performance for the period. I've shown you how I turned Swing Trader's performance around during one of the most difficult periods I have ever witnessed as a trade picker.

    The point is not about whether markets are conducive for trading but whether you are ready with a process that you are confident you can implement and stick to. If you have a solid process in place, any market environment is right for trading. If you don't have a proper process in place, then it isn't the right time for you to trade. Ever.   
    (Quick update: Our performance in March has been even better than in January and February. Our best month ever, in fact.)

  7. The Sensex could rise 70% in the next two to three years
  8. If you are still on the fence, then I would like to share an interesting prediction from Rahul Shah, co-head of research at Equitymaster. Rahul believes that the Sensex could rise 70% in the next two to three years. Here's his rationale...

    If the profit margins of Sensex companies, which are currently at 12.2%, reverts to their ten-year mean of 13.5%, and if the EPS grows at its long-term rate of 15%, then we may see an upside of 70% in the next two to three years. You and I know very well that investing is a game of probabilities, not certainties. Nobody can guarantee this will happen. But it definitely helps to be in equities and trade in them when the long-term view is positive. Being in the right market at the right time increases your odds of success.

This could be the best time to trade equities. So if you don't know where to start, or you don't have process in place, or you don't know the right way to trade, then I have good news for you. I can help you with all of that in our premium short-term stock recommendation service, Swing Trader.

I have designed Swing Trader with the trading newcomers in mind. I won't just recommend stocks to you; I will teach you how and why I recommend a trade. The focus is to 'learn' and 'earn'. It doesn't matter whether you are a novice or seasoned trader; there's always something to learn. And don't worry - you do get all my stock recommendations along with your subscription.

If you've come this far, I know you are interested in making money from trading. And that's why I welcome you to consider trying my service for 30 days...

Happy trading!

Do you think this is the best time to trade equities? Share your views in the Club or share your comments here.

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