Everyone has their own reasons to trade in the market. But some reasons can prove to be harmful to your bank balance 🙂
Let us understand each of these reasons:
1. Trading to get rich quickly. Does not happen.
This is one of the biggest reasons why people trade. People think that trading is all about punching orders and watching the money magically grow.
But let me tell you, it’s nothing close to that!
Trading takes years of hard work, planning, and discipline to become profitable over a period of time. Almost everyone loses money in the beginning.
If you want easy money, ask for a raise from your manager. Do not come to trading
2. Trading to meet a financial objective like a car or a house or something.
When you have a goal in mind while trading, your money means something to you. And if the money means something to you, you will make mistakes.
Never trade with a target number or objective. At every point, just take the trade, do the right thing, and hope for nothing. Do what you have to do, and do the right thing with the trade.
3. Trading to recover lost money. Never ends well.
The problem with this is you are already emotional about the money lost. And emotions lead to irrational decisions. There is a sense of urgency to recover your losses, and stock markets are a patience game. If you are in a hurry to recover, chances are you will go broke.
Also, if you lost money recently, chances are that you are not trading well. Why do you want to trade when you are in bad form?
4. Trading to get a kick. Instead, go play cards in Goa 🙂
Lastly, if you are trading simply to get a kick from it, there are better places to go. You can go to one of the many casinos in Goa and happily play cards. The losses are limited and smaller, and it is way more fun
Trading is not gambling. It is a serious game with a lot of hard work, discipline and analysis.
So when should you trade? I’m sure you must be wondering that
You should trade when there is money you do not need for something else, and you see a good opportunity with that in the market.
This is because it is easy to be unemotional if the money you are trading with means nothing to you.
But the moment it means something — like a loan repayment, a credit card bill, or a home loan EMI it becomes tricky. You get nervous, stressed, and emotional.
You start making the wrong decisions and blow up your capital.
If you are trading for the right reason, then Sensibull is worth checking out
It helps you predict the market direction, create and analyse trades, find great trading opportunities, and execute them in less than 3 clicks!
Check out our FREE Option Chain tool now