Skip to main content

Positive Trading

Trading lore is replete with stories of novice traders who work tirelessly to achieve big rewards, yet success eludes them, time and time again. Even seasoned traders may start to believe they have lost their touch when market conditions change and they can't seem to take home enough profits. A positive, optimistic mindset is essential for trading success. Eternal optimism is an asset when it comes to mastering the markets. On the other hand, it is important to show the proper amount of optimism. It is important to be humble, but also sure of your abilities and the positive outcomes you can achieve if you put in the proper amount of time and effort.

Popular inspirational books, such as "The Power of Positive Thinking," imply that optimism is "good" and pessimism is "bad." This view sometimes extends to professional psychology as well. For example, Dr. Martin Seligman argues in his book "Learned Optimism" that optimists are more likely to persist when faced with severe setbacks, while pessimists tend to give up easily after only a minor setback. But optimism may hamper some traders.
Dr. Terrance Odean, a behavioral economist, argues that traders can often be too optimistic and too overconfident. In his studies, he has shown than overly confident traders take risks that they should not, and end up with lower amounts of capital than if they had been more cautious. Dr. Seligman similarly notes that pessimists may not feel very happy most of the time, but they are more likely to view circumstances more realistically than eternal optimists.

In the end, a trader should be optimistic yet also realistic. Many trading coaches advise novice traders to "expect to lose" when they trade. At first glance, this may sound like a pessimistic outlook, but it is all a matter of perspective. Unrealistic optimists expect life to be easy. They expect big rewards with relatively little effort. Novice traders with this approach may naively think, "I'll make 10 trades and I can expect 8 to be profitable." A more realistic trader may think, "I would be happy at this stage of my trading to make profits on 4 out of 10 trades." Traders who have genuine self confidence are realistic and committed. They expect to make heroic efforts to achieve success. They do not unrealistically believe that high probability setups are easy to find. Traders with low self esteem, in contrast, are afraid to look at the downside. Admitting the amount of work and effort it takes to trade profitably is daunting. It is so overwhelming that they would rather fool themselves into thinking that trading is easier than it really is, and that even a minor effort will produce success. But in the end, they are just setting themselves up failure. Winning traders are truly self-confident. They are not afraid to admit their limitations and accept the obstacles they must overcome to achieve success.

Thinking like a winning trader requires a combination of realism and optimism. It is useful to remind yourself of the facts of life in the trading world. First, it isn't necessary for every trade to be profitable to make an overall profit across a series of trades, and indeed, many trades result in losses. Thus, it is vital to assume you'll realize more losses than wins, and to manage risk on any one trade accordingly. Second, it is a fact that many times, novice traders lose a lot of money trying to survive the learning curve. One will become very disappointed if he or she is not prepared to lose some money early on when first starting to trade. It is useful to look at the lost capital as "tuition" you spent to learn valuable trading lessons. An optimistic attitude is powerful when used properly. It is important to be optimistic when it comes to the big picture; remind yourself that if you put in enough time and effort, you'll eventually achieve profitability. But at the same time, don't set yourself up for disappointment and failure by thinking that trading is easier than it is. Trading is difficult, but if you persist and overcome obstacles, you will trade like a winner.
Source:Innerworth

Comments

  1. hi,
    this is a very nice blog. very informative and educative.keep it going.

    ReplyDelete

Post a Comment

Popular Posts

Your Bill Amounts Are Going To Increase From June 1, 2016

Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994. Union Finance Minister, Arun Jaitley, in his budget announcements proposed to impose a cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services. The present rate of service tax will be hiked to 15 per cent from June 1, 2016, from 14.5 per cent. Take a look at what gets expensive:



Phone Bills: Your phone bills are going to go up. So, pay a good 15 per cent now on service tax on phone bills.

Restaurant Bills :If you are dining in a restaurant that already has service tax applicable, you are going to pay more on your eating out. Though 0.5 per cent on a single bill may not mean much, frequent diners may end-up paying a lot during the year.

Travelling: You will have to pay more for air travel, as there is a service tax on tour operators and travel agents.

Moneycontrol Terminal - Streaming Live Quotes

Moneycontrol has introduced a new feature Moneycontrol Terminal - an enhanced version of real time price updates. Though there were live quotes provided by the website previously, the present form  gives a better update of live quotes of indices and stocks.

This terminal provides live streaming quotes for both NSE and BSE free. It also provides quotes for most of the indices and also the constituents/stocks of the indices in BSE and NSE.  The terminal also provides live news and other market news, which might be useful for traders. The hardware recommended is minimum of 1 GB RAM.

It would be better if stock of any choice could be added ( market watch of a set of stocks ), which would be easier to track one's trading positions. Anyway, this is a better alternative for people who don't have access to any trading software, to view live action of the markets.




You could just try the same here at Moneycontrol Terminal


NSE Level 3 Data

Before we get into details of NSE Level 3 Data, it is important to first understand the basic operations of the stock market.  All publicly traded equities have a bid price and an ask price when they are bought and sold. The bid is the highest price a trader( or an investor) is willing to purchase a stock. The ask is the lowest price in which he is willing to sell a stock.


Depth of the Market(DOM):Looking at a Level 1, Level 2 or Level 3 quotes can give a trader, a basic idea of how a stock is performing at any given time.

Level 1 Market Data provides the basic market data which includes Bid price, Bid size, Ask price and Ask size.

Level 2 Market Data provides more information than Level I data. Mainly, it doesn't just show the highest bid and offer, but also shows bids and offers at other prices. Now level 2 provides market depth data upto 5 best bid and ask prices.

Level 3 Market Data provides market depth data upto 20 best bid and ask prices .  This primarily used by brokers and ma…