Sapphire | Blogs

Admin123 : Sid Bhattacharjee
Date : 2020-11-11

Trading is a mind game, no strategy, no nothing!

In the age of social media, it is part of our life to see what’s going on around us through various social media channels such as Facebook and Instagram. Often, I find messages from traders in those social media channels like; is this Stock going up or down, should I buy or sell or hold the Stock as if, answers to these questions will make them rich in one trade. It hurts to see, how ill-informed a trader could be and then entering into a speculative market with little or no understanding of how the whole system works can lead to only one thing, despair. I often use the example of a person who drops in to play a game of Golf without knowing what are clubs, how to play a shot, which club to play when, what are the rules of the game and how the game is scored.

Any market, be it real estate market or Stock market, is all about transferring money from the masses to a few lucky ones in the long run. In most real property speculation cases, the masses make money, a lot of money, but the money stays as paper profit and evaporates before they realize their paper profit into real hard cash. In most Stock market speculation cases, the masses barely survive a few years, thanks to lack of knowledge of the market and any interest to learn the tricks of the trade. But both types of speculators all serve their useful purposes in investment food chain contributing their hard earned money to the market in exchange for a dream.

For any prospective traders, hope this is not in a discouragement. Trading is a hard mind game and not everyone is suitable to be engaged in such a hard game. Most have neither frame of mind nor mental fortitude to survive in this hard game. Mastering technical analysis or numbers or options are, at best, a tentative first step into the right direction with no guarantee to any success. Training a right frame of mind is the most difficult but absolutely necessary part for success. Unfortunately, as it turns out, most are simply not ready to go through that hard stage of the learning process because it is a very painful process. Trading is essentially process of overcoming fear, greed and mastering tranquillity of mind in this hard school of speculation.

Every trader should find his/her method/system which suits his/her own situation and personality. In Sapphire Capitals’ training and trading applications, we have put together a comprehensive framework that is designed for success but it boils down to the right orientation of the mind and discipline of the trader. Trading success is all about making as much as one can when one is right and losing as little as possible when one is wrong. That is the essence of this business. So, any theory or system which looks after the above is a good one.

A trading system, one that delivers high probability trades, is a weapon of a soldier in this market, a trader must have one as soon as possible. Otherwise, it is like turning up to fight a war without any arms and ammunitions.

Money management is where most traders go wrong in almost all cases leaving only a few as the winner at the end of the day. Money management and discipline of mind is what makes or breaks a trader at the end of the day, not the elementary entry and exit method.

Trading is a mind game and without having a right frame of mind, it is a losing game even before it starts. Training a trader's mind is the first step for any successful trader but almost all new traders neglect that part and that explains why more than 95% of traders are a failure in the long run. Acquiring the knowledge of the market is not difficult for anyone with average intelligence after a few years of hard study in the market. But it is neither the level of intelligence nor the knowledge that decides the outcome of the market operations of a trader. It is the decision making process that is so hard for most traders to overcome and that is the main reason for a success or a failure for all the traders. Some find it easy to make decisions and stick to it and most find it so hard to make decisions and stick to it. Unfortunately, any decision making process in trading is a pain-taking process and humans tend to avoid pains and go for pleasures even if for temporary ones.

In any trade, entries and exits are very important and should be in the top of the mind of a trader. But, It is just that psychological aspects of trading are much more important than entries and exits, and decisive for the success or failure of a trader in the long run. Perhaps exits are more important than entries because any perfect or near-perfect entries are possible only in hindsight.

Assuming one has decent trading system and market knowledge and decent info, it is ultimately how disciplined and how well that trader can take the pain of making right decisions at the right time that decides the outcome of the trades. Hence I call trading a mind game.

Please visit the following URL for more information on various trading applications from Sapphire Capitals which are designed to deliver high probability trading opportunities for swing trading as well as for intraday trading:

Wishing you all the success in all your trading endeavours.

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