By Amit Malhotra
Most of us often wonder why despite the surfeit of information and assistance available round the clock such as Internet, newspapers, magazines and television, success at stock trading remains elusive. It is quite bizarre to see people losing money in stock market.
Thousands of people across the world spend millions of dollars on stock trading courses and stock analysis software and yet they fail to make money in stock trading.
What generally happens is that gullible people are first duped into believing that that they will master the art of making profits in stock trading just by joining tutorial classes. When they have shelled out, say, $1,000 as course fee, they are made to buy videos showing intricate charts and graphics that are beyond their comprehension. Those who try to invest according to the instructions will end up losing thousands of dollars. Small gains here and there only add up to frustration. The more they try to learn, the less they appear to know. The result will be they keep spending more and more and losing more and more.
If success in stock trading could be achieved just by buying the software, there would be no shortage of people minting millions of dollars and the streets of our cities would be jammed with chauffer driven limousines.
The truth, however, is that most stock traders do not understand even the ABC of stock trading and that is why they are not successful.
You must know that by the time you start trading in stocks, you have already built up a sufficient reservoir of general trading sense without actually being aware of it. For example, who does not know that you can make profit when you buy an item at lower price and sell it at a higher price? You do not have to enroll yourself in a pricey stock trading tutorial, buy costly books or videos to learn this elementary fact of business.
Strange as it may appear, most people do not have the confidence in their ability to put this elementary principle into practice. They do not understand that they do not need to know any thing more about making profits in stock trading than this basic principle of buying low and selling high.
The third requisite of being successful in stock trading is the attitude. Were you not told even when you were a toddler playing with your peers not to cry when you lost in your games? Do you need to be told in special coaching classes this very childhood lesson? The truth is that you already know a lot about successful trading but you are not just aware of it.
You have to take your profits and losses with a certain level of equanimity and objectivity. Losses do not occur only in stock trading, but in every business. Success and defeat occur in every area of life. You have to remain calm, detached and unemotional whether you earn and you lose. Excitement at gain may turn your head and you may not take the right decision next time. Loss may depress you, blur your vision and lead you to further losses.
Most of the traders learn how to analyze charts and understand the financial reports of the companies. They are happy when they place orders but they start losing their wits. Soon after the prices start will go against their predictions. They feel scared thinking that their analysis was wrong and they would lose money that they honestly think they cannot afford to lose.
This kind of attitude leads to the loss of focus. You start making losses. Your confidence in your ability to take right decisions starts faltering. Instead of looking inwards for the causes of your failure, you start questioning the system you are using even though it was working pretty well. How could the same charts and graphs that helped you to predict the future prices correctly have gone wrong now? You had taken lots of pains to test this system over several markets. [It was so solid, but now ......]
What needs to be fixed is not the system but your own attitude towards it. You have to eliminate fear of failure and greed for profits from your attitude. Accordingly, you need to make small changes here and there in your trading plan. For example, you need to reexamine at your stop loss limits that you had earlier fixed. The one simple trick can change the matrix of your trading success or failure.
Open an account with Sogotrade
If you are new to Sogotrade: Online stock trading investment
Article Source: http://EzineArticles.com/?expert=Amit_Malhotra
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment