Stock market is a
profession where you would be learning a lesson on daily basis. I guess this is
one of the reasons why I'm staying humble in my life. For the first 15 days, I
made 25% gains on my capital. I took one big position and from then I was not
able to manage it. Just imagine two trades wiping out your 25% gains. This is
one of the biggest blunders I’ve committed in my trading. Couldn’t digest what
I’ve done with the trades. I know that I should cut my losses. I guess I should
go back to school and learn how to maintain discipline in my trading.
Lessons:
Never take a position that is not possible to manage.
Always think negative once you take your position.
I’ll explain both these lessons. Managing a position is
important in stock market. One should have reasonable control over position. We
should make sure that we shouldn’t afford to lose more than 2% of the capital
(Total Capital). In my case I was just complacent ( 25% profits in less than 15
days) and took a position that instantly became out of my control and didn’t
had the common sense to book the loss once I saw the weakness in the particular
position.
If you didn’t have the inclination to book loss then you’re
preparing for the disaster. This is one of the biggest lessons I learnt in this
month. I have taken a vow not to do these kinds of trades in my life time and I
believe I wouldn’t do that in my trading.
It is important to develop negative thinking in trading. I
know I would receive some rants, but let me explain the thesis behind this
thinking. If a trade goes according to our plan then there is no problem for us
to make money in the markets. Only when it goes against us, we should have a
strategy to manage it and comes out with minimum loss. I’d recommend traders to
always think negative about their positions and dig deep into the negativity to
find solution for the problem. I didn’t have this negativity and as a result I’ve
given up all my profits I made in just couple of trades. It’s a pain and I’m
feeling like an Ass****!
Good post. What positions you took. please explain.
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