Trading is inherently risky, because outcomes are always uncertain. Even with the same set-up of your variables when you take a trade, the outcome is not guaranteed. Sometimes you win, sometimes you lose. Traders often tend to believe that there must be a way to trade without taking a single loss. This random nature of outcome entails him into changing his system too soon, but the same chain of events continues. What’s the correct approach, then?
Welcome to our next session on Trading Psychologies. This week, we take a look at successful professionals from various walks of life & try to understand how they approach risk. There are a lot of lessons for us, the traders!
A successful professional is one who is less bothered about the outcome but more concerned about the method he follows. Let’s take an example of a doctor, a heart surgeon. He performs several operations a day. Most of his patients are cured, some die. Is he filled with remorse or sorrow when any of his patients die? Never! If he became emotional, he cannot perform his next operation. His only concern is limited to whether he did the operation properly. Beyond that, things are not in his control.
Let’s take the example of a cricketer, a batsman, suppose. Each time he goes out to bat, is he afraid of what others will think of him if he gets out at zero? Never! At that point of time his only concern is to play every delivery at its merit. He is there to take calculated risk for his team. Beyond that, things are not in his control either!
These successful people…these extraordinary professionals from every walk of life…in sports, medicine, music, whatever…has one common trait…that they are not afraid to make mistakes. They are not filled with fear of what other people will think of them if they fail on any occasion. This particular approach sets them miles apart from average people, who are always filled with confusion & fear of failure, which pulls them back from behind. How do the professionals achieve this beautiful state of mind? They mostly inherit it from their parents, sometimes from their coaches. In some cases, they learn it from experience, too.
That’s our learning point, dear friends. We, as traders, should be able to embrace risk with an open mind. That’s on a trade-by-trade basis or micro level. But at the same time, we should be confident on our ability to generate profit in the long term, on macro levels. With this mindset, we are now ready to accept any outcome & we are not going to deviate from our trading plan in fear of a loss!
We hope, you enjoyed this little episode on trading psychologies. We will back with some more next week. In the meanwhile, keep visiting our website www.proficientgroup.in/blog every morning between 8:30-9:10 AM for hot stocks/sectors of the day.
