Stop asking others about their “Views” on the markets.

Always remember, Your mind is an atomic bomb ~ One thought is enough to change your course of action and can lead you to make some bad financial decisions.

What do I mean by this?

Let’s take an example to understand it better.

Say, Nifty Fut. is trading at 18k, and according to your plan, you need to go short if it goes below 17800.

So, the plan is clear! Sell nifty below 17800.

But! You are not confident with your analysis, so you check your favorite social media platform to see what other “EXPERTS” are expecting the markets to do.

And you see one of the big “EXPERT” is expecting Nifty to take support at 17750.

Now, you are even more confused, whether to take short trade according to your plan or go with the “EXPERT” and buy nifty at that support?

Well, you thought that the expert has more experience than you so he is more likely to be right, so you choose to go with his view, and bought Nifty when it came near 17750.

Nifty Falls to 17500 levels in the next 2 sessions, you made a loss on that long trade, the expert said that they gave the new view to their “Premium” members so yeah he/she didn’t make a loss on the trade ;)

But, you feel devastated, that even when your analysis was right, you made a loss!

Why?

Because you listened to others, instead of listening to your trading plan, see, making a loss isn’t a big deal, but breaking your plan is!

Why don’t we understand that the markets don’t care if you are an expert or a Noob, it’ll do what it has to do.

Your job is to execute your trading plan religiously, and if you have an edge you don’t have to worry even if every other expert is suggesting to do the opposite of what you have to do.

Expect for the best but prepare for the worst!

See, there are various regimes that the market goes through, sometimes it’s trending, sometimes it’s sideways, sometimes we see big intraday moves, sometimes all the moves happen overnight, sometimes the Volatility is high, and sometimes it’s low.

The mistake that many traders make is that they feel that markets will keep behaving the way they are behaving now, so their Risk management and position sizing is based upon the current market conditions, say we haven’t seen big gap downs in the past 6 months, but it’s not like we won’t see any in the future.

And that’s where most people lose all of their profits and sometimes even their capital.

Why?

Because they don’t prepare for the worst!

Whatever system you are trading with, whether it’s an option buying, selling, cash, directional, or non-directional system, you must know how much you can lose if shit hits the fan!

It might sound a bit negative, but this is what we have to do in order to prepare ourselves to take the hit because there is always a chance of things going haywire.

Like if I’m a Positional cash trader, and I usually risk 0.5% on every trade, my avg. stop-loss is say, 3%, and I have a max of 4 positions open at a time, then I should be ready to see at least a 10% loss on each stock in overnight positions, and in that scenario, I would lose close to about 6.6% of my account.

And if you think that this type of situation could not happen in intraday, then wait till you see your broker going off, or NSE shutting down their servers, Risk is everywhere, and we can’t escape it, remember there are no free lunches! That's why it’s better to be ready for these kinds of situations so that we can keep our Position sizing accordingly.

This won’t happen often, but even if it happens once in your lifetime, and you aren’t prepared for it, it might hit you pretty hard.

Save your chips!

Let me ask you a question, What is your goal as a trader?

I’m sure, most of you would say, to make a lot of money (Hey, deep down we all have similar desires, right ;)

Well, there’s nothing wrong with having a goal like that, we all are here to make money.

But, you would only be able to make money in the longer term if you are able to preserve your capital.

And, you should know that most of the traders blow their accounts at least once in the first two years of their trading.

And Not only beginners, but we have seen well-established profitable traders going out of the game because they didn’t focus on preserving their capital.

So, now you would have got that our priority as a trader should be to preserve our capital!

And the only way to do that is by avoiding the most obvious stupid mistakes, one of them is risking too much!

Most of the traders are usually in a hurry to make money and are usually overconfident about their abilities, so they take big risks, Risk hai to Ishq hai, right ;)

Well, the markets usually love these kinds of people, so it gives them kind of a bear hug, it’s just that it’s not good for those traders, only markets enjoy doing it. (Now, Let’s get back to the topic)

This is one of my favorite quotes ~

“The house doesn’t beat the player. It just gives him the opportunity to beat himself.” – Nick Dandalos

Here, the player has only a few things in his hand, and one of them is Risk control.

So, yeah if you are serious about this business, keep your bet size small, that’s the only way to survive here in the long term!

Compulsive Trading is a No-No!

What’s the easiest way to lose money in the market?

It’s easy, get into the habit of trading Every day!

Okay, answer me one simple thing. Are you here for the thrill or the money?

I know most of you would say that you are here for the money, but are you?

The answer to this lies in your trading journal.

Check how many times you have taken the trades you never intended to take first but you didn’t want to miss the excitement, so you took it.

One of the qualities of those who are addicted to trading is that they can’t even sit our for a day without taking a trade.

And if you are into markets for some time, you would have known that Not all days are conducive for your strategy, sometimes it’s a good choice to sit out, remember “CASH” is also a position.

Also, if you are getting a thrill out of your trading, then either you are new to the markets or you are doing something wrong! Because good trading is monotonous and not thrilling at all.

So, Learn to sit out of the markets, and trade only when the pitch is good, and it will definitely be beneficial for you in the longer term.

Always Manage your Risk First!

You know there are two kinds of traders ~

One who calculates their SL level and risk before entering the trade and one who enters the trade first and then thinks about risk and SL levels (that too when the trade starts to go against them).

Okay, answer me one thing, do you think that a successful trader has some sort of special powers or skills because of which he is profitable?

No, they are just disciplined!

They are disciplined about calculating their SL level before entering in a trade, they are disciplined about placing their SL in the system, they are disciplined about not risking too much on a trade!

And, yes these simple and small things are what makes a trader profitable.

It might sound simple, but 90% of the traders don’t do any of the above, they just wait for some miracle to happen that will make them bumper profits!

They don’t understand that it's these small things that make big differences in your equity curves.

You have to understand this, it’s not about making bumper profits one day, it’s about not losing your capital by doing stupid mistakes every day, it’s about being disciplined every day, it’s about being sticking to your system even during the rough days and still not abandon it!

That’s what makes all the difference!

There is no shortcut!

Yes, you read it right, there is no shortcut!

You can’t just come into the markets, take someone’s course and start minting money from the next day! It doesn’t work like that!

Then what’s the right way?

Well, the only way to learn to trade is by extensively going through hundreds of charts, every day!

You might say that you already know this, tell me something new, right?

This is the problem!

We know too much (well at least we think we know) and we do very little, well this is a normal human tendency to try to find something which is confusing or complex, and charts seem to be fairly simple, right?

Well, the day you understand that all your answers are in your charts and in your journal, you won’t run behind any courses, or Ready-made systems, or anything else like that.

You can’t escape the grind, you have to put in the work to reap the benefits, and yes it’s hard to go through hundreds of charts every day for years, and still, you find no success.

But, that’s what it is about, who said that trading was going to be easy.

So, stop running behind shortcuts, start watching as many charts as you can, put in the work, and you’ll find your edge over time.

I’ll end this article with one of my favorite quotes of all time ~

All things are difficult before they are easy. - Thomas fuller

So, that’s it for today from our side, I hope you enjoyed reading it and If you found it useful, then do share it with your friends over social media.

Thanks for reading :)