Lousy Traders V/s. Lovely Traders – Check list for you.
January 25, 2012
Lousy Traders V/s. Lovely Traders – Check list for you.
I have always received request to give tips to be a good trader….today I am going to deal with that. Use this as a check list and find out where you stand. Hope this will be useful to make you a lovely trader, if you are not already.
Disadvantage:-
I am sure you would have come across a trade where the shares you sold went up and shares you bought went down. Lousy traders trade without any edge over other traders.
Lovely traders have a system that gives them an advantage over other traders.
Always Loser:-
No matter how much money they make during the trading period when they get out of the market….lousy traders have mounting losses…in fact, they get out only when the losses become unbearable. Haven’t you seen a new trader buying and selling in multiple lots in F&0?
Lovely traders make money consistently. In fact, they follow the strict stop loss levels. Loss of 2-5% in a given trade gives them 95-98% of capital to trade for the next day.
Random Trades:-
This is the most observed traits of lousy traders……if somebody tips them and tells that it is a sure shot….they will put their 100% in that company. There is no preset limit or trading strategy with them.
Lovely traders risk preset amounts of money on each trade. They know the principles of asset allocations.
Risk – Reward Ratio:-
Lousy traders do not understand the odds of winning in a given trade. Their attitude is….shares will go up when they buy and shares will go down when they sell.
Lovely traders understand the risk/reward ratio in every trade. Due to this they know what to do when the market do not support their trades.
Risk Management:-
Lousy traders come to the market with no understanding of their risk of ruin. They can not imagine that they can get wiped out.
Lovely traders manage their risk of ruin so they will always be there for the next day.
Emotions:-
Lousy traders trade with emotion of greed, fear, hope and euphoria…no trading plan, strategy or risk management. Buy, Hold and Pray to God that shares prices moves up….are the 3 usual steps they follow.
Lovely traders use a trading plan for each decision. If the plan is not working...they will go back to the starting point and will not hesitate to close the trade.
Ego Problem:-
Lousy traders have ego problem when they are winning. The irony comes when they win in a bad trade by stroke of luck or timings. Winning in bad trade make them believe that they are master in the market. They start to trade even bigger after that.
Lovely traders surrender to the market. With each win they become more and more humble. They give credit to the market for their winning….they knows that they can control their losses and profits are the blessings of the market.
Going out of the way:-
Lousy traders go out of the way to trade……they will play on margin, dubba trading, oversize trading, etc. For them big trade means big profit.
Lovely traders trade just big enough to make a meaningful profit. For them making a meaningful profit and losing a minimum amount in a trade is a strategy.
No Fall Back:-
Since lousy traders trades randomly, no risk management and have high ego…they do not have a particular guide, role model or a consultant. When they lose…they have no fall back to learn from their mistakes.
Lovely traders have their guide, role model and consultants….even today also…Mr.Rakesh falls back on Senior Damani or Mr.Warren Buffett has Mr.Charlie Munger!!
Wish You All A Very Happy Long Weekend.
Hope you enjoyed reading this email…This article is being sent as a part of investor educations initiatives taken by Destiny Management Services.
Live With Passion…Invest With Passion.
Hitesh Parikh.
P.S:- Just 6 days to go for our special relationship offer. Do not miss.
Lousy Traders V/s. Lovely Traders – Check list for you.
I have always received request to give tips to be a good trader….today I am going to deal with that. Use this as a check list and find out where you stand. Hope this will be useful to make you a lovely trader, if you are not already.
Disadvantage:-
I am sure you would have come across a trade where the shares you sold went up and shares you bought went down. Lousy traders trade without any edge over other traders.
Lovely traders have a system that gives them an advantage over other traders.
Always Loser:-
No matter how much money they make during the trading period when they get out of the market….lousy traders have mounting losses…in fact, they get out only when the losses become unbearable. Haven’t you seen a new trader buying and selling in multiple lots in F&0?
Lovely traders make money consistently. In fact, they follow the strict stop loss levels. Loss of 2-5% in a given trade gives them 95-98% of capital to trade for the next day.
Random Trades:-
This is the most observed traits of lousy traders……if somebody tips them and tells that it is a sure shot….they will put their 100% in that company. There is no preset limit or trading strategy with them.
Lovely traders risk preset amounts of money on each trade. They know the principles of asset allocations.
Risk – Reward Ratio:-
Lousy traders do not understand the odds of winning in a given trade. Their attitude is….shares will go up when they buy and shares will go down when they sell.
Lovely traders understand the risk/reward ratio in every trade. Due to this they know what to do when the market do not support their trades.
Risk Management:-
Lousy traders come to the market with no understanding of their risk of ruin. They can not imagine that they can get wiped out.
Lovely traders manage their risk of ruin so they will always be there for the next day.
Emotions:-
Lousy traders trade with emotion of greed, fear, hope and euphoria…no trading plan, strategy or risk management. Buy, Hold and Pray to God that shares prices moves up….are the 3 usual steps they follow.
Lovely traders use a trading plan for each decision. If the plan is not working...they will go back to the starting point and will not hesitate to close the trade.
Ego Problem:-
Lousy traders have ego problem when they are winning. The irony comes when they win in a bad trade by stroke of luck or timings. Winning in bad trade make them believe that they are master in the market. They start to trade even bigger after that.
Lovely traders surrender to the market. With each win they become more and more humble. They give credit to the market for their winning….they knows that they can control their losses and profits are the blessings of the market.
Going out of the way:-
Lousy traders go out of the way to trade……they will play on margin, dubba trading, oversize trading, etc. For them big trade means big profit.
Lovely traders trade just big enough to make a meaningful profit. For them making a meaningful profit and losing a minimum amount in a trade is a strategy.
No Fall Back:-
Since lousy traders trades randomly, no risk management and have high ego…they do not have a particular guide, role model or a consultant. When they lose…they have no fall back to learn from their mistakes.
Lovely traders have their guide, role model and consultants….even today also…Mr.Rakesh falls back on Senior Damani or Mr.Warren Buffett has Mr.Charlie Munger!!
Wish You All A Very Happy Long Weekend.
Hope you enjoyed reading this email…This article is being sent as a part of investor educations initiatives taken by Destiny Management Services.
Live With Passion…Invest With Passion.
Hitesh Parikh.
P.S:- Just 6 days to go for our special relationship offer. Do not miss.
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