Market Psychology – How much Investment?
By: Gaurav Taneja, Financial Trainer, Venteskraft May 13, 2020
Welcome back to the Market Psychology series. If you missed it read it here. In the previous blog we came to know how the extreme behavior can be devastating for a trader and he should accept the criticism. You can check that blog here. Today we will know about the right behavior or the right perspective towards a very important physical aspect of stock market, Investment.
From the very start of your trading in the stock market, you must have heard this phrase or even had asked yourself, “How much investment is needed to trade in the stock market?” Actually it is a wrong question to ask. If a person is asking this question he is clearly implying that he wants a minimum amount to start trading with and then make that amount into a vast pile of money. One thing for those people, this will happen either in the movies or there will be a prodigy. You and I both know that we don’t come under either category.
First of all the minimum amount of money to trade is not a criterion. It should not be looked upon as someone who meets the minimum investment requirement qualifies as a good trader. Just imagine a person has around 10,000 in his de-mat account but not even a paisa more in his bank account. Now if he loses the money his trading career is finished. Can any person trade with such a pressure on his mind? Describing it would be like a person trading with a gun to his head. And in relatable words, a person who is unable to meet his bare minimum expenses trades to hone his or her skills.
This bad practice of looking at the investment as an eligibility criterion to become a successful trader has pushed many beginners out of the stock market. Any beginner in stock market should be financially free before completely relying on the trading as a source to pay their bills. And the amusing thing about the stock market is when you start rising up, when you start making consistent money, you will eventually increase your investment and your focus will shift towards it. No one needs to tell you what actual amount you need to trade with.
We at Venteskraft first make the person feel comfortable with the markets, and the conditions, only then we advise them to increase their investment. So the real question shouldn’t be “How much investment is required for stock market?” but it should be “How much investment is needed for my survival as well as learning stock market?”
