Smart Money Rules

 

Smart Money Rules💰

In the stock market, “Smart Money” doesn’t just mean big money  it means informed, disciplined, and strategic money. These are the rules that experienced investors follow to grow wealth steadily, protect capital, and stay consistent.

Capital Protection is Priority📌

Return of capital is more important than return on capital.

  Use stop-loss in trading

 Don’t invest emergency funds

 Avoid margin unless you fully understand the risk

Invest With a Clear Goal🔥

Every rupee you invest must have a purpose:

  Retirement

 House purchase

Passive income

Child’s education

  5-year growth plan

Diversify, But Stay Focused🎨

  Large-cap (Safe zone): 40–50%

 Mid & Small-cap (Growth): 30–40%

Debt/Funds/Gold (Stability): 10–20%

Use Stop-Loss & Position Sizing🚀

They stay in losing trades too long and exit winners too early.

Solution:

Set stop-loss at entry

Define how much you will lose per trade (1–2% of capital)

Book profits partially or trail your stop-loss upward

Professional traders lose often – but they lose small.

Remove Emotions from Decisions🎯

Common emotional traps:

FOMO (Fear of Missing Out)

Panic selling on dips

Revenge trading after a loss

Smart money follows systems, not emotions.
Build discipline through journaling and review.

Time in Market🤝

You cannot always buy at the bottom or sell at the top.
But staying invested in quality companies over time brings exponential growth.

 Example:🗣

₹10,000 invested in a good stock in 2010 could be ₹1+ lakh in 2024

Missing just 10 best days in the market can destroy 50% of your returns

 The earlier you start, the more you earn — even with small amounts.

Conclusion🔐

Plan before placing orders

Manage risk more than chasing returns

Follow rules — not tips