Earned a lot of money through trading...lost a lot through it...realized it's not worth the time and effort but still can't get over it...
Just can't keep our eyes off moneycontrol, the red / green color gives us a different feeling. Then comes the temptation of trading few shares in cash market what harm could it do. This marks the beginning of our trading adventure leading to little bit of options, little bit of futures and eventually a lot of money being lost.
So what is it that draws even savvy investors towards trading, why can't we simply stay away from it.
1. The instant gratification.
It's difficult to completely get out of this but trading with around 2 - 3 % of your corpus or a fixed amount which you can afford to lose should be used.
BUT MAKE SURE THAT THIS AMOUNT SHOULD NEVER INCREASE WHATSOEVER.
2. Creating a corpus for investing.
If somehow you manage to create a corpus for investing through trading, one day you 'll end up selling a portion of your portfolio to cover up the losses incurred by trading.
Historically, you would be better off investing your small savings rather than trying to create a bigger corpus via trading.
3. Making it a secondary source of income.
This can be done only by professional traders. A lot of effort / practice is required. Those having jobs out of stock market should refrain from this.
It appears simple but the moment you understand how difficult it is to earn continuously by trading it would already have been too late.
If your speculative instinct gets better of you then the below quote of Benjamin Graham should always be remembered...
"By speculating instead of investing you lower your own odds of building wealth & raise someone else's."
Hi,
ReplyDelete90% of the investor are by default investor because of stuck in trading position as price come down from buying level.
I think you need a proper Mindset because in trading 80% is psychology and 20% methods.
To make that kind of Mindset you need much time and efforts.