Whenever we hear about financial market, stock market and trading all. We have a negative perception towards it, that is “Gambling“. But nobody has ever thought in this way that if this gambling then why do banks and all big institution trade in the markets. Why do people call it gambling? Because they want easy money and they think that this trading brings easy because you just need to sell and buy by clicking the buy and sell option. If this was an easy money then everyone would have been a rich man but the reality is something else, 90% of the people loose money here because they treat it with gambling mindset. You know what why 90% of the people looses here because of the lack of education, skill and knowledge, they don’t want to spend anything on their learning, improving skill and all. It keeps on happening until they change mindset from “Gambling” to the “Skill” based income. Same people will start some business and won’t expect the returns till 2-3 years but when they are trading they want results from the very first second. Why only 10% people make money through trading? Because this 10% people treat trading as the business or skill based income. They don’t expect returns form the markets in the starting phase of 1-2 years. But after spending 1-2 years in the markets with no expectations then market starts rewarding them with massive returns and that day everyone start calling them fortunate or overnight success but only 10% people know what they have gone through till 1-2 years, when every loss feels personal and every win takes you to the sky. Those who survives this phase the markets rewards them, those who don’t, call it gambling and what not. If you are starting trading and you also want to come in those 10% traders who are profitable then you need to keep some points in your mind which can make you profitable.
Investor Or Trader
You need to decide first whether you are trader or investor because both terms has different meaning. Some people want to earn daily profits by investing in the markets and ends up blowing their all funds. So after you have decided that you are trader. The first thing you will do after deciding that you are a trader, you need choose the market in which you will trade
Markets
1. Forex Market
2.Stock Market
3.Commodities Market
4.Crypto Market
After you have decided which market you will trade, now you need to decide which instrument you will trade.
Instruments
1. Forex Market:- Which currency pair you are gonna trade like eurusd, gbpusd, gbpjpy etc.
2.Stock Market:- Which stock or which sector you are gonna trade like fmcg, oil&gas, defence etc.
3.Commodities Market:- market which commodities you are gonna trade like gold, silver etc.
4.Crypto Market:- which coin you are gonna trade like bitcoin, dogecoin, etc.
After the instruments you need to decide which session you will trade
Session
1. Forex Market:- There are 3 sessions in the forex market asian, london and new york.
2.Stock Market:- It opens for limited period of time but still you need to decide whether you will trade in morning, or afternoon session.
3.Commodities Market:- It also has 3 sessions asian, london and new york.
4.Crypto Market:- It runs 24/7 but still it has 3 sessions.
After the session you need to decide the timeframe which you are gonna trade.
Timefarme
1. 4 Hour
2.1 Hour
3.15 Minute
4.5 Minute
After timeframe you need to decide your daily loss limit
1. 1% of your capital
2. 1.5% of your capital
3. 2% of your capital
4. 2.5% of your capital
After daily loss limit you need to decide your position sizing like with which lot size you will trade
1. 1 Lot
2. 2 Lot
3. 3 Lot
Now you need to decide which broker you will trade in
Broker
1. Forex Market:- Exness, Xm, Vantage etc.
2. Stock Market:- Zerodha, Groww, Angel one and many more.
3. Commodities Market:- Zerodha, Groww, Angel one and many more.
4. Crypto Market:- Delta Exchange India
Now you need to decide maximum trade per day
1. 1 trade per day
2. 2 trade per day
3. 3 trade per day
After deciding each and everything, in the end you will have a system which is set of rules which you are gonna follow each and every day. When you have set of rules, now you need a proven strategy which works in the markets.
Strategy
What is strategy in markets? A strategy in the market is a pre-planned way that tells you when to enter and when to exit from the trade. Strategy = Rules + discipline. You can make your own strategy or you can follow someone’s strategy by learning from them. Well every strategy works well in the market but it depends, how much time you have spent with that particular strategy. According to the successful traders give your 100 trades to your strategy. I’m gonna list some strategies which is prevalent in the markets which most traders use and make money through it.
1. EMA
2. Support& Resistance
3. Trend lines
4. Order Blocks
5. Demand & Supply
6. Fair Value Gap
If you want you can use any of these strategies and backtest it before going live and risking your hard earned money. Give atleast 100 trades to the strategy which will tell you win ratio of the strategy in the markets in the different market situation.
Journaling The Trades
Every successful trader journal his every trade by writing it anywhere which tells you, what wrong you have done, did you follow your rules, did you enter in fomo, desperation, greed or fear. If you are starting your trading career, journal your first 100 trades and follow it with one strategy. By the end of 100th trade you will have the data of your profitable days, loosing day, which timeframe gives you best trade, in which session your strategy works well, the risk to reward of your strategy. In the end you will have the data of everything and then you can plan your trading according to the data which will decrease your looses.
Psychology
When you have each and every thing but your psychology sucks then eventually you are gonna loose in the markets. Because trading is all about mindset and psychology, and if you didn’t work on both then you can be in trouble. What is psychology in markets? Psychology is how do you handle your emotions, when you are in the losing trade, how long you hold winning trade, how soon you cut the losing trade, how do you handle yourself in winning and loosing in both the situation, how do you accept that losses are part of the game. These things comes into the psychology, if you stay calm in every situation then it can lead you to becoming the profitable trader, if not then it can turn the profitable trader into the loosing trader. Most people don’t focus on making their psychology strong that’s why they ended up as a loosing trader. If you want to be a profitable trader the you need to work well on your psychology and make it strong enough to keep you calm in every situation.
Conclusion
Well if you treat trading like the gambling then it’s a most simplest and easy to loose money but if you treat it like business or skill based then it can be the your another income source which can fulfill your luxury fantasies. Just stick with one strategy, protect your capital like a warrior protects it’s sword in the battlefield because in the market your sword is your capital and opportunities is unlimited in the market. So protect your capital, trade with discipline and set of rules and make this as your another income source