……..There is no nobility in poverty flattering enough
It’s been a long time now, since I’ve been into the financial markets and trading, while this period of fickleness, so many challenges and opportunities were there and I’ve been learning through them, setting up basic laws which surely will help you as well.
1- No emotions
The markets don’t act according to your emotions they act as emotion in all as everyone is involved, so you don’t have to follow your sentiments but the sentiments of the market. It’s always beginner’s luck at the start, so keep your guts away.
2- Risk Management
No matter how big the opportunity is, you never know when it’s going south, while trading in HFM (High Frequency Markets) basically very volatile market, they can get you very easily as it may look like profits always being so ostentatious. Not only in HFMs, the normal trading stocks can make you intuitive, dealing with this is emotion is the most challenging part when it comes to trading.
3- Principles are everything
If you have decided to follow a system, follow it completely for only equal number of trades which qualify the system as effective or obsolete . It’s an iterative process, learn, apply, analyze and go again.
4- Never Trade for recovery
Many traders after a loss try to dig more to get the money back, it’s the major issue, never trade to get the money back, perhaps trade to maximize the profit and minimize the risk with proper strategy.
5- Fundamentals and Technical go together
If you think you can trade only with good looking charts, it can go wrong, look for the fundamentals and understand both of them, together you will have a better understanding of the market and thus decreasing the chances of you caught in wrong positions.
6- Learn and earn
Learning is a never ending process, never shy away from it. Learn, understand and then apply, do not do anything you haven’t understood , then it is just gambling.
True Stories (Movies-Documentaries)
The Big Short- How an investor (Michael Burry) found the bubble in US mortgage market and earned billions by shorting it.
The Wolf of Wall Street- Jordan Belfort with his sales power took advantage of pink sheets and made millions by selling penny stocks.
Too Big To Fail- After the economy melt down, how Henry Paulson withhold the US economy.
Margin Call- How mortgage backed securities led to fall of great financial institution.
I hope this recession period ends soon.
Invest In Yourself first. Happy Trading.
“…A day is just a piece of time, That let us live or Die…This Day Let Us Live And Live Only”