A trader is not only a
trader in front of a terminal, but has to develop trading skills in other
aspect of life also. We can never say that our professional life is different
from our personal life; it is after all the same human being in two different
arenas of life. Being a trader is nothing but to deal with the emotional
behavior of oneself and million others. Have you seen that after market hours
it looks so obvious how the market behaved and it was quite obvious to
behave like that? But during market more often than not traders do
something completely different. It might be even true with some relationship
also, at the time of emotional turbulence one does something unexpected and out
of character, where as analysis of the same after the event occurred seems so obvious that the
right thing to do was something else.
So why is that? It is
because the lack of ability to understand one self, and not to learn from one’s
own mistakes. By learning I mean change in action also, and not just thinking
and saying that I have learnt a lesson. The learning should reflect in one’s
action also. An example could be, if one do not stick to stop loss or do not
have it at all, and the trader is bound to loose huge money. So he thinks “I
have learnt it this time that stop loss is important and should have it”. But
eventually he repeats the same action again, that is he makes the same mistake
again. So he has not learnt. Reason being is that, learning is not an easy
thing, because it will result in change of action, and when an action is
repeated again and again it becomes a habit. And habit as we all know is not
easy to change.
Coming back to trading,
as said earlier one has to have a traders mindset not
only during trading but always, in his life. Trading is nothing but “wise
tradeoff decision” that one makes continuously. So say if your family
needs your time but you are busy in the markets most of the time, trading or
otherwise, you are sacrificing your family in an expectation that you
will make more money, which you may or may not. But
if you give time to your family you will surely have
a good time and they would appreciate it, which would eventually yield in
higher levels of serotonin and melatonin (Happy hormones). This will again
result in an emotional stability within you, which is the basic ingredient of
trading, NOT strategies. It is true, believe it. In today’s world of computers
and algorithmic trading one is so lost that he develops a staunch belief that
it is the computers which are trading and resulting in price fluctuations. If
that was the case then computer science guys would be making most of the money
trading.
Trading is very simple
if you are a trader, and by now you know being a trader is not just about
buying and selling, its much more than that, but still very simple.
