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Is Trading A Difficult Task ?

Kaushal Kishor Singh
21/10/2020 0 0

It's as easy as other businesses and as tricky as other businesses. It depends on your excellent planning, mental stability, research, sound judgement, and most importantly, risk management. The blunder most of us do in trading business that we think there is some secret to success. Finding out higher accuracy with technical pattern and indicators is one of the biggest mistakes. Technical analysis itself doesn't tell you what to buy or what to sell. Instead, it should be used for entry and exit purpose. We must have fundamental knowledge(basic including latest news) to select stocks. After selecting stock, we have to look at charts and pattern to find out entry and exit points.

Next step is to make risk-reward, and it must be 1:2 or higher. It means if there is 1 rupee of risk, then there must be a profit target of 2 rupees at least or higher. Before entering any trade, you must look at risk-reward. Most of us don't factor opposite of expected result because their focus is more on profit than possible loss. Here we have to be risk-oriented trade, not a profit-oriented trader. Don't expect there will be more than 70 per cent accuracy in real trading. It generally falls to 60-70 per cent because our emotion plays a more prominent role while trading. So there is a chance of losing in 4 trades at least out of 10 trades. This is why we have to follow stop loss in every trade. Once it hit, don't remain with the position. The reason is that save your capital first, then you can grab opportunities on the next day, but once you lose your capital, there will be no opportunity. We also have to write down a set of disciplines which we strictly have to follow. 

Now ask yourself: can you do these things mentioned above? If yes, then it's easy. If not, it isn't easy. It's you who make it easy or complicated based on our understanding and approach we have to get the result.

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