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Making Money by Trading How Difficult

Discussion in 'Forum Posts Worth Reading' started by kaisarimam96, Feb 15, 2014.

  1. kaisarimam96

    kaisarimam96 Member

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    Dear Shabbir,

    Trading in stock and futures is a field which attracts lot of media attention and everyone at some point of time notice this. Me also not an exception, people told me in trading you can make lot of money and that was the attraction i started trading. I hope majority of people do this to earn millions. But till now i did not met any person who got quick rich by trading but i have met many people who lost all saving, or amount invested or deep losses. I heard in news some brokers also committed suicide as they were not able to pay losses.
    How easy or difficult it is to make money by trading requires some observations as below. This is purely my personal observation

    (1) Making money by trading consistently is one of most difficult tasks but it appears contrary.

    (2) Trading looks very easy but in reality it is extremely difficult task. to make money consistently training is required. usually people think no training is required to make money in trading.

    (3) There are many ways to make money in trading e.g. day trading, pair trading, index and stock futures trading, news bases trading, indicator based trading, chart patterns based trading, long term investing, options strategies and many more. May be everyone trades as per their own style. the most important thing is which type of trading suits your personality must be understood. If you have limited time may be day trading is not suitable for you and many other consideration are to be studied.

    (4) most of people think there must be some fixed set of rules formula or system which is clearly and precisely written and should be able to produce profits consistently. This is a myth. Because if there is some fixed set of rules which can give guarantee of profit no body will take opposite side of trade. because trading is zero sum game. my profit is someone's loss and vice versa.

    (5) Stop loss must be used in all trading, all trades are entered on the basis of some assumption or conclusions. if price goes to a point which says assumption was wrong then exit the trade. actually most of people do not want to book loss, but loss is essential part of trading. Ego of people do not allow them to accept they were wrong and they should accept loss. This is one of most difficult thing in trading. If you have this emotional balance then trading is for you.

    (6) Always remember most of major market moves in market is due to activity done by big players like FII, mutual funds, Hedge Funds etc, they take opposite side of trade. These people have more skilled traders working for them, more sophisticated system and resources. They are not in market to give you money but to take money of your pocket. You must know you are fighting with best brains to earn money from trading.

    (7) Last - Fortune is possible and many people have made billions from this market consistently. if proper trading plan with proper psychology is implemented consistently then huge sum of money can be earned from market over the period.

    Expert traders please offer your comments and put questions if any.
     
    kaisarimam96, Feb 15, 2014
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  2. shabbir

    shabbir Administrator Staff Member

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    Brokers committing suicide has no relation with trading in market because brokers are just to help you trade in exchange and they don't invest themselves. Need to know to comment on this though.

    No I don't think so. It is a task who knows how to do it and that is true for anything and everything. If you say I want to pass IIT, what would you need, education on how to do. If you are surrounded by people who have never passed IIT's and don't know how and where to educate yourself, you would tend to believe, getting into IITs is one of the most difficult task at hand. But then that is not true. it needs education, dedication and hard work and on top of that, willingness to give time to the business you want to be doing.

    This is the mistake. Education is a must.

    Exactly. Charts works best for me because I am too impatient.

    Yes.

    Yes. Let me again share the same example of IIT. Would you keep trying to get into IIT for your entire life, NO. You would make a max of 3 attempts and then it is better to move on. Stop loss is almost similar, You can be wrong in markets and stop loss is your savior.

    Focus on one thing. It is not important that where money can be made but what is important is where you can make money from market and try to rinse and repeat where you can make money.

    Education and then applying yourself is always needed in any business or market.
     
    shabbir, Feb 16, 2014
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