Can money be made in trading ?

By | May 11, 2012 8:04 am
21 Comments

 

Trading is always a high return high risk game and it needs nimble trading approach with tons of discipline.

Traders say its  the Big traders who move the market and we end up making loss.

Well i do not buy this reasoning. The most Important part in trading is trading discipline and trading system(Throughly Backtested)

Some general reason why traders loose money

Mistake # 1: Jumping in with Both Feet

Would you perform a surgery, or fly a plane loaded with passengers without any previous training? Of course not. That would be insane.

But when it comes to trading the markets, that’s exactly what a lot of people do. They jump right in, without any kind of guidance or plan because they feel confident they can beat the market.

But making money trading the markets is not easy. If it was, you could just quit your day job, buy a little condo on some tropical island and never look back.

Now is it possible to reach that point? Sure. But it’s not going to happen overnight.

So before you start trading, you need to make sure you have a plan.

After learning the basics of the market, you should start out with a paper trade account to try out a specific trading strategy. Then you can move on to real money trades, risking a small percentage of your portfolio.

There’s an African proverb that says “only a fool tests the depth of the water with both feet.” When trading the markets, it’s always a good idea to tiptoe before getting into the water.

 

Mistake # 2: Eating Like a Sparrow, but Defecating like an Elephant

Back in the 1960s, a pair of Canadian psychologists made an unusual discovery.

They determined that after placing a bet at the racetrack, people feel much more confident about their chances of winning than they did prior to making the bet.

That’s just the way our brains are wired. Once we make a choice, we tend to find ways to justify our earlier decisions.

This instinctive response can be dangerous in the market.

If a trade starts to move against you…you may find many reasons to “hold on,” hoping it will turn around.

And vice versa. If you get into a trade and it soars higher, you may take profits too early. Or even worse, you may hold out so long that your winner turns into a loser.

End result: you either wind up eating like a sparrow, where you nervously close out small gains. Or you defecate like an elephant – holding onto losers until they swamp any gains you made.

One way to protect you capital is to always use stop losses. And always know – before you get into a trade – where you plan to take profits.

Mistake #3: Focusing on Making a Million Dollars

The 1980′s movie Wall Street coined the term “greed is good.” But things are different in real life.

If you only focus on making money when trading the markets, it’s very likely you will lose it all. When greed takes over, traders make huge mistakes, such as betting all in one single trade or not using any stop losses.

Before placing a trade, you should always ask yourself “how much will I lose if this trade goes wrong?”

But many traders have no clue how much capital they’re risking on any single trade.

That’s a mistake.

All the most successful traders focus on limiting risk and protecting capital, rather than just making money. By limiting their downside, they successfully grow their account over time.

You can easily copy their strategy.

As I mentioned before, start by always using a stop-loss. That will protect you from losing too much.

But equally important: you should also limit the amount you risk on every single trade. I recommend risking no more than 5% of your account on any trade.

As you can see, letting emotions get in the way of your trading is not a good idea.

If you’re making any of the mistakes mentioned above, it’s only a matter of time before your account will blow up. Most traders learn this the hard way.

But if you avoid these three key pitfalls, you will not only save money, but also become a better trader: one step closer to complete financial independence.

 

I have Started Taking Technical Classes on One-One Basis where i cover the following topics

1. Understanding the Market Psychology/Rules to be followed in Trading and Why traders loose money

2. Learn how to Trade Intraday Based on Trading System(Combination of Mechanical System and Charts)

3. Learn how to take Positional Trades.

So if you are interested do contact me @bhandaribrahmesh@gmail.com for further details.

 

21 thoughts on “Can money be made in trading ?”

  2. Manoj

    Dear sir i have loose more than 3 lakh rupees & i am confused now how to recover this loss i have 3 lakh in my hand only is it possible with nifty eod

    Reply ↓
    1. Bramesh Post author

      Dear Sir,

      You can recover your money by trading with a system and using proper trading discipline.

      Rgds,
      Bramesh

      Reply ↓
  4. srinivas reddy

    Sir in your blog Nifty intraday graph auto refresh starts with 30 seconds is it possible to make every 5 or 10 seconds.

    Regards
    srinivas reddy

    Reply ↓
  6. Ravindranathan

    Sir,
    i am tiny trader i lost 75% of my capital.please send me the details
    about your trading system and course details
    thanking you
    Ravindranathan

    Reply ↓
  7. Vips

    What a great Article again by a great Man…. Bramesh,bhai , aapke fan club mein sabse pehla naam meri hi hai 🙂

    After associating with you from first week of November 2011, I am again proud to say that my trading skills are getting better and better each passing day with your guidance.

    And after learning your course, I have become a profitable trader. Being a “Trader’ is very simple, but being a “Profitable Trader” requires huge efforts. Thanks to you for helping me throughout this Journey.

    I have a firm believe that If I will stick with your for next few years, I will become a ” Professional Trader” which is my dream and you are helping every day and every way to realize my dream. God bless you and your dear near ones 🙂 take care

    Reply ↓
    1. Bramesh Post author

      Thanks a Lot Vips for your kind words. I only taught you but its your discipline and control over your emotions which is making you a profitable trader.

      My Best wishes for years ahead.

      Rgds,
      Bramesh

      Reply ↓
  8. satagouda

    sir,i am very much inspired by your thoughts.in the past 3 years i lost some 1.5 lakh in all type of trading.i paid Rs 5000 pm for sure shot stock option tips.no single tip worked.he never told me to buy frontline stockoptions like sbin or larsen.he used to give stock options like mercetor line 90 call,kingfisher 60 cal,he used to say that buy kf60 cal at 3 sl=2,tgt 6,9,12.and i every time saw that it opened at 4&he then tell to book profit at 4.2.sir,i am a mechanical engineer by profession and this is my past story.now i play only during pre market&get profits from strong stocks opening lower.ex.today i bought sun pharma 60 nos at 482.65&sold immediately at 486.i try to make use of volatility.i had subscribed for tips to ten paisa.com,globalstockinfo.com,power your trade.com&LASTLY 5000 TO A MAN WHO CALL HIMSELF INDIAS MOST TRUSTED INVESTMENT GURU ,WHO IS HAVING CLIENTS ALL OVER THE WORLD,WWW.ASHOKSHARMA.CO.CC.SIR.I LIKE TO PLACE ONE TRADE ONLY/DAY,I WOULD LIKE TO TALK TO YOU.

    Reply ↓
    1. Bramesh Post author

      Dear Sir,

      Never go with Tip Providers. Why So .. If they are so good in giving tips why are they not trading on there own.

      A simple calculation will reveal the big fraud these people do.

      They charge 3000-5000 per person and even if they get 10 clients per month by showing there fake calls they make 50K per month.

      If you want to trade successfully trade by learning. It your money is involved why would you depend on others for your trading decision.

      Empower yourself.. Be accountable for your Profit and Loss.

      Call me on 09985711341 if you want to talk to me.

      Rgds,
      Bramesh

      Reply ↓
  10. Joy Ghosh

    Thank you Bramesh. Happy Dusherra / Bijaya to all. I think risking 5% in each trade is too much. It should be around 2 to 3%.
    I also experience trading with low volume has higher probability of success as emotion of losing would be less and stop loss will be lower(for long positions). So if a trader has capability to trade 4 nifty contracts then he/she should trade only 2 and it will give him/her more confidence.

    Cheers,
    Joy

    Reply ↓
    1. Bramesh Post author

      Thanks Sir and same to you. Trading with less volume will make profit also small and Losses are also acceptable as it will not hit your financial life as you are free from stress of lossing ie. even if you losse
      your trading capital things will not haywire .

      Bottom line you are not having the FEAR OF LOSING when trading with low volumes.

      We need to have a strong risk management system which will come with experience and following it with discipline.

      If you want to make trading as a profession we need to trade with large volumes as profits will also get multiplied exponentially and your losses also.
      To handle such big profit and loss you need to prepare yourself like Army guys do during there Drills.

      In such stressful situation your response should be automatic to cut losses if you are on wrong side of trade.

      Hence it all falls to your trading psychology and discipline to follow your system,Volumes will not matter.

      This is my perceptive to trading.

      Think BIG and Grow BIG

      Rgds

      Reply ↓

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