Market Psychology
By: Gaurav Taneja, Financial Trainer, Venteskraft May 9, 2020
No matter how professionally you understand the strategies or how adept you are in analyzing the market, there is always the mind which is dominant while you trade. And even you know what happens when one wrong trade occurs, more than 85% people are bound to take another wrong trade. Why does this happen, what makes us so blind that all our knowledge goes to an inaccessible bag. Market psychology comes into play here.
Market Psychology is going to be a series of blogs from Venteskraft, where we discuss various behavioral aspects which take control of our trading. Our main aim will be to remind you again and again that it is a little difficult to control the emotions while trading but it is definitely not impossible.
Most people who enter the stock market are definitely attracted by the false promotions of making easy money. But experienced traders know that stock market is actually one of the toughest to make money from. Toughest definitely means that it won’t be done in a day or two, but will take constant effort for a longer period of time. You need to have a decent strategy, and it needs to keep evolving with time and market. Apart from that each trade requires you to control you emotions.
As you can see, only very few people who start trading, actually succeed, just like people starting any other new business venture. To make it more clear. Just look into the streets and find one successful restaurant, there will be 50 more restaurants which will be struggling. Similarly in trading, for every successful trader there are 100 unsuccessful traders. The only reason for this is the entry criteria. In today’s digital world anyone can start trading.
Traders mostly focus in technical, fundamentals and sometimes even rely on advisors for the best buy/sell signals and forget the most important aspect, Market Psychology. But nothing can be called “best” when it comes to stock market, which is literally being moved by millions of people with different mindsets. The most important aspect of trading isn’t really when you buy or sell, but it is what you do before, during, and after. Whatever happens to the price of the scrip you are trading on is not under your control but how you react to it is.
As it is usually said to keep your office matters to office and your personal matters in your home, similarly in stock market you need to keep all your emotions aside when trading. You should keep your greed; fear and pride in check and don’t let them dominate any of your decisions while trading. That is the reason we a lot each and every client in Venteskraft a financial trainer who will monitor their losses and profits, and find out the weak points to work on them.
