Trading Journey lessons
When we start our trading journey, we are very tentative and hesitant. This has two causes, the root cause
is that we have not have proper education. People treat stock investing like a game. If an individual
practices pencil trading honestly and with diligence he will never be unsure of the direction or his journey
when he trades with real money. It will be second nature. New comers get bored quickly and jump into the
market without any education. They do not value their capital because it is borrowed from elders,
relatives or parents It hurts when you see capital loss. The capital that one earns with hard work and effort
seat of brows.
The second reason, he starts will small capital. An untrained individual looses all his capital within a short
span of time and vows never to return to the market. He forgets the valuable lessons he learns on his
loosing trades. Even if he wants to continue trading it takes great courage to put in fresh capital, there he
falters.
Many great traders have blown their account several times at the start of their journey, and have come
roaring back. It takes great courage to be a trader. The market is a great teacher and seasoned players learn
new lessons every day. Time spent in the market is valuable. A trader has to deal with a sea of
uncertainties, the outcome is random.
Therefore capital preservation is paramount. You must have a plan, in which your ability to absorb a
fixed amount of loss in a trade must be predetermined. Preferably one tenth of your capital is the
maximum you can risk in one trade and a fifteen per cent stop loss is the maximum you can afford.
Unfortunately we make rules only to break them later down the line.
As time passes by and you become modestly successful carelessness creeps in and you forget to apply the
stop loss. Then a catastrophic loss jolts you into a rude awakening.
Trading is not a sudden decision, it needs education & discipline. Patience is a virtue. This is proven time
and again in trading. You must wait infinitely until the time the candles align to your plan. Even then you
might be blind sided.
With a low initial capital modest returns can be generated. But if you jump into options trading with no
prior stock picking /buying experience then your chances are slim. When you climb the investing ladder
the first rung is NOT options trading. That step is higher up the ladder.
