ARE YOU A BORING TRADER???
I thought the first post of this blog would be to ask every visitor if he/she was a boring trader.
Boring Trader huh? You would say “I thought stock market trading was the most exciting activity in the whole world”. How can it be boring? Imagine when you put on a position – long or short!! The adrenaline runs through your body when the system message says the order has been executed. Bam! You are in business. The heart starts beating faster with every tick. Suddenly you see the price go up. You start calculating your profits. The acidity swells from your stomach right to your chest. The breathing becomes faster. If this was the first trade you ever took you suddenly realise you are no longer a “Trade Virgin”.
You cannot take your eyes off the screen. Suddenly the world becomes a whole new exciting place. You are the next Guru of the Stock market. You start imagining people following you for your clairvoyance of the markets. You have arrived. This goes on for sometime. The market gives you the success and you start drinking it like slow poison. And then the dreaded day comes…The market takes it all back…and more!!
I characterise the Boring Trader as one having the following attributes.
He is not bothered with where the market is headed.
He is not the least bit interested in predicting what the market or a particular stock will do in near, medium or long term.
He has a system which he has back tested and refined over time.
He only follows the system. Period.
He does not see any Blue channels of read any Pink newspapers.
He believes all the news is already built in the price action.
He thinks about how much he will lose before he puts on a trade.
He knows that once the loss is accepted profits will always run in.
He knows the importance of risk and money management.
He has a daily, weekly, monthly and yearly target clearly defined and stuck on the monitor.
He has a list of trading rules which he never ever breaks.
He stops trading after the daily target is met. Each time. Every time.
He shuts of the computer when the daily target is met even if it happens in the first 10 mins of trade.
He treats his trading as a business and as a businessman knows how to manage his risks for maximum profits.
He never ever enters a trade based on his perception of the market. All trades are strictly entered based on the system.
He thinks taking a quick loss is the coolest thing about trading.
He is humble and down to earth even though he makes a ton of dough every month.
He knows that the most profitable trading is the most boring trading.
Do you see yourself in all the above points. If yes, congrats. You are already on your way to becoming a Boring Trader. If no, don’t worry. I will guide you to become one.
This blog will talk about all the tools and psyche required to become a Boring Trader. If I could summarise the Boring Trader philosophy it would be “Taking the Jazz out of trading to mint money”.
So lets embark on the journey…I promise it won’t be boring and it will certainly put you on course to becoming a Boring Trader.