It is a land of dreams, where fortunes are made.
The potential here is immense and the opportunities countless. This comes from a day trader who thinks he has been able to fathom the shallow shores of this abysmal ocean. Yes, I still am at the shores after more than 3 years of trading. I can swim and enjoy the thrill!
Recently there has been a change in my schedule and I only get an hour or two, I skip my lunch and trade. Why, you ask? If I were to pay you 500 bucks per hour for playing an enjoyable game, won’t you? The market’s not only a place of work for me, it’s a part of my way of life. I don’t know what it has learned from me but I have been taught few of the most vital lessons of my life by it...
I, like any young man, had been quite inquisitive about the ‘truth’, ‘meaning’ and ‘purpose’ of life. Time and again I felt that whatever wisdom was available to me had something lacking in it. Then stock market happened to me. I came to know that whatever happens in this world does not happen for a reason but because of one. It is the cumulative direction of a multitude's thinking/actions that guides the events in this world, hence the events can be predicted to a certain degree of accuracy. As the sample space increases the probability of success of forecast increase. For example, you cannot always say with certainty how will one person react to a particular item of news but you certainly can predict how a group will react to it with an appreciable amount of certainty.
Lesson no. 2 was to leverage practicality and rationality while discounting emotions. Emotions are like cancerous tissue; you never know when they will start to grow beyond control. In the stock market where you are pitched against the rest, a weakness in you can cause havoc. Panic, fear, elation and celebration all these are to be studied but never practiced. One has to understand these emotions in others to achieve his goal. Let me give u a simple example. The price of stocks of N corp. pvt. ltd falls by 1%. A rumor spreads in the market (thanks to information technology, the speed of light is the upper limit and quite achievable for rumors to travel at) that the stock is ‘going under’, emotions stir up, PANIC spreads, now what do you do? When you can find an answer which you think merits attention, you can very well go ahead and do it (consult, if you wish).
Well, with long practice and exposure to uncertain conditions of day trading you will soon realize that a part of your brain tingles when uncertainty faces you, it is the rationality area. You can feel it only if other distractions (of emotions) are not there. Then you strike, strike a decisive well thought action. And the best thing about stock market is that you instantly come to know the result of your actions. Either you are rewarded with tangible profits or stinging losses, thereby bringing about a change in your behavior as per the reinforcement theory. Learning happens. Next time you are wiser and readier. Someone once said, if you have seen ‘n’ different situations, the probability that you have experienced the (n+1)th situation increases with the value of n. At n 'tending to' infinite you are the Oracle!
to be continued....
badhiya badhiya... :)
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