Trading Psychology

Check The Fuel Before Driving A Car

“I know what I have given you… I do not know what you have received.”

― Antonio Porchia

The greatest disaster in trading is overtrading. When we don’t know what we’ve and how much capital we need to risk to become a profitable trader, we take random trades and lose significantly.

Each trade we take is associated with the susceptibility to loss, plus we’ve to pay charges and taxes for every transaction we make, which makes it difficult to become a profitable trader.

Our edge is in managing the risk. If we’ve capital, we can take a few more risks tomorrow and the day after tomorrow, even after having losses, but if we ruin our entire wealth by taking random trades, we’ll have no tomorrow.

Remember always what you’ve and how much capital you may lose after taking a particular trade. Things can go wrong despite your herculean effort. Be ready to face that.

Take the trade only if you’re willing to lose the capital at risk, plus charges and taxes. You’re welcome to proceed if you can afford the chance; otherwise, let the opportunity go.