You, Me, and Trading by Prashant Shah

Author:Prashant Shah
Language: eng
Format: epub
Publisher: Notion Press
Published: 2022-05-04T00:00:00+00:00

Me: Yes, but I guess that’s natural.

You: Yes, at times, it is funny. They relate even silly things to market trends.

There was even a popular funny image shared over social media that talks about it.

Anyway, coming back to what you said earlier, its great if they enjoy the discussion about markets by removing their position glasses. They can even make it part of the process and have rules to trade it. It is great that they are passionate about the markets; the next step is to make money from the passion of tracking the markets. That’s what we are discussing in this book.

Having the documents in place will not make a trader worried or perplexed. They now have something to refer to.

Me: The problem is that the markets are too dynamic and situations are difficult to control at times.

You: The problem is that most people don’t know the real problem. If you want to identify the real problem, reach into the core of every problem. That will tell you what to focus on. Where all your enquiries end, that is the real purpose of what you are doing.

Me: Let’s say purpose of trading is we want to make money.

You: Well, first, that is a common problem. Everyone thinks we trade to make money. It is a vague statement. It is like saying I am living to become happy. Everyone does that. Do you aim to become doctor, engineer, pilot, or athlete only to make money? You want to pursue that profession because you like it, and you want to become good at it. You will also earn money by doing that. The same applies to trading. Do it to become good at it.

I discussed in the earlier chapter the reasons why people trade. We’ll discuss this later. For now, let’s assume that the purpose of trading is to make money. But let’s be more specific. Let’s take an example of an active trader. What do they want?

Me: Making money every month from market.

You: Right. Let’s assume that’s what they want to achieve. Is it possible by mere speculation?

Me: No.

You: Do you think it will happen very easily, without any effort tom learn any method? Had it been that easy, everyone would only do that in life. Why do people engage in setting up industries or doing something else?

Me: Right. So, they want to make money regularly.

You: Let’s say they have some mathematical model based on derivatives and option strategies that has got a high probability of delivering returns. Though there is nothing that will work in all types of market phases, there will be some assumptions in the strategy, which is an important variable. But that’s a discussion for another day. Let’s assume they have that model, which has higher chances of delivering profitable trades. Even then, many people will be unable to implement it successfully. Why?

Me: Lack of discipline?

You: Everyone knows that they must remain disciplined to get better results. Every successful trader has said it in some or other way.

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