Why do people fail at trading?
It is true that the success rate in trading is very less. You will find only a couple of good traders in a city. In my opinion it is due to the imbalance between two extreme emotions or personalities. One cannot understand or succeed unless a balance is created between them. All that is needed to create the balance throughout this adventure is your Time and meaningful effort.
Here are some of those extremities that need to be recognized and balanced.
🚀Lack of awareness Vs Hyperawareness
There are people who enter in trading without knowing this business. They would throw their hard-earned money in the market just because someone else is making money here. These people have very short trading career as they lose all their money in a couple of trades. At least knowing about trading will make them shy away from high risk scenarios and hence help in surviving for long.
On the other hand, there are people who have acquainted themselves to the markets to such a level that they want to know everything. They would like to learn each and every indicator and apply it on their charts, until they are left with a chaotic system which is bound to fail.
Market is an ocean. You can’t know everything but can try to master a few things.
🚀Fear of Loss Vs Greed
Let me say that most of the people entering this business belong somewhere in the middle class. They always have dearth of money. So, they trade with less money and are afraid of losing it. They would either book very small profits or exit too early from good trades. But unfortunately, they won’t show this haste in losing trades. So, they book 1 point and lose 2.
On the other hand, there are risk takers who have money but they are greedy. They would often book heavy losses or do not book healthy profits on time. They would only fume when their profitable trades turn into losses.
Having less or more is not the question but discipline of booking profits and losses is the answer.
🚀Stubbornness Vs Springy
People would hold on to a trade or system infinitely. They would not believe in cutting small losses or mend their system for improvements.
On the contrary, there are those who would keep on hopping on to one system or the other like a spring . They would book small profit/loss in one stock and buy another with higher risk.
Improvement and patience are the key to success in trading.
🚀Dependent Vs Egoist
Each one of us would have bought stocks on the basis of tips from our broker, business channels or friends. Some of us would have moved on knowing the reality of tipsters while the others would still be clinging on to them. The latter would never learn a lesson before losing their entire capital.
On the contrary, an egoist would only be overconfident in what he is doing. Having your ears closed in trading is a great thing but lack of flexibility is another. If the whole world says that the ship is going to sink, you can not just sit on its deck waiting for a miracle.
Be an independent but flexible thinker.
Thanks for reading.