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The problem of "INVERTED EXPECTATIONS" - The #1 reason for failure as a trader.
(A THREAD)
This is a very common problem that I've seen with a lot of (wanna-be) traders.
(1/10)
(A THREAD)
This is a very common problem that I've seen with a lot of (wanna-be) traders.
(1/10)
Most people enter the financial markets with absolutely wrong expectations, mostly misinformed & misguided by some market "guru" (there are tons of 'em !!).
As a result, the poor guy starts off calculating..
(2/10)
As a result, the poor guy starts off calculating..
(2/10)
-- "How much is my monthly requirement? "
-- "How much money do I need to make this much from the markets? "
-- "RandomGuru sir says its possible in (BLAH) rupees. I already have 2x(BLAH) in my savings bank."
-- "WOW! I am going to be SOOOO rich !!!! I am so excited! "
(3/10)
-- "How much money do I need to make this much from the markets? "
-- "RandomGuru sir says its possible in (BLAH) rupees. I already have 2x(BLAH) in my savings bank."
-- "WOW! I am going to be SOOOO rich !!!! I am so excited! "
(3/10)
Sooner rather than later, the market reality HITS the poor guy, depleting some or all of his financial & psychological capital.
Most traders who read this thread will relate to this hypothetical story in some way or the other.
So, I say --
"INVERT YOUR EXPECTATIONS"
(4/10)
Most traders who read this thread will relate to this hypothetical story in some way or the other.
So, I say --
"INVERT YOUR EXPECTATIONS"
(4/10)
-- Well, how do you "invert" your expectations?
Its simple.
Instead of focusing on how much "%return" can you earn, focus on...
(5/10)
Its simple.
Instead of focusing on how much "%return" can you earn, focus on...
(5/10)
-- WHEN & HOW do you wish to interact with the markets (a.k.a. TradePlan).
-- How much money do you want to risk (a.k.a. TradingCapital). Start off with an amount that you're OK to lose. Something close to what you typically spend on buying something like a mobile phone.
(6/10)
-- How much money do you want to risk (a.k.a. TradingCapital). Start off with an amount that you're OK to lose. Something close to what you typically spend on buying something like a mobile phone.
(6/10)
After this, you continually work on sticking to your TradePlan even when it is VERY HARD to do that (a.k.a TraderPsychology).
If you're observant enough, you will gradually (& continually throughout your career) keep realizing places where your trading plan needs amends.
(7/10)
If you're observant enough, you will gradually (& continually throughout your career) keep realizing places where your trading plan needs amends.
(7/10)
Do those amends, but be VERY VERY MINDFUL of over-doing this part as its a slippery slope!!
This brings us to the word "MINDFUL". I wont go into details of how you can do that. Google it and you'll see a ton of articles (Agreeably, most of them are utter bullshit !
)
(8/10)
This brings us to the word "MINDFUL". I wont go into details of how you can do that. Google it and you'll see a ton of articles (Agreeably, most of them are utter bullshit !
)(8/10)
But being more mindful is another journey that you'll have to embark on (just like becoming a trader). So let's not deviate from the main topic of this thread. I'll probably write another thread on that sometime.
(9/10)
(9/10)
So when do you actually get to calculating "HOW MUCH %Return can I make" ???
It's simple.
You get to that when you actually are able to make consistent returns, at least over a trade set of about 100-200 trades.
How long will that take?? Let time tell you that.
(10/10)
It's simple.
You get to that when you actually are able to make consistent returns, at least over a trade set of about 100-200 trades.
How long will that take?? Let time tell you that.
(10/10)
