ENDING THE NECESSARY CAREER HIBERNATION
Being a daytrader can be very frustrating. Waiting for the price to come to your zone/level is like waiting at a red light, 1 minute feels like an eternity. However, there is a surety that eventually the light will go green again, unlike what happens in the stock market, where guarantee is a myth. My father believes that keeping money in his cupboard is safer than “gambling” in the stock market because the risk of us getting robbed is less than the risk of losing money in the markets. There’s a stigma of trading and/or investing in the stock markets. Blame it on the global financial crisis of 08' or the never-ending stories of your uncle who lost everything in the stock market (I don’t know how but surprisingly every family has an uncle like that). Anyway, I’m not here to discuss why stock market is an evil tool created by corporations and brokers to publicly loot poor, ill-informed traders, but my own ongoing fight with it and how I lose money time after time but still return back with the hope of doing something different this time.
After making repeated losses week after week and pouring my brother’s savings and my sister’s one month salary down the drain in just 2 months, I took a much-needed break from it. Not because as my parents would say, “I’m getting addicted to it” but because- a) I had no more money left and b) to reflect back on my mistakes and how could I make it better. After a few hours of number crunching and a lot of painful flashbacks to loss-making days, I realized I had lost the majority of my capital in just 2 trades. And in both the trades, I bet more than 30% of my capital, didn’t put a stop-loss and traded against the trend. The 3 cardinal sins of trading and I committed all of them together, what a legend! Had I not entered those trades, my P&L would be in green right now. But that is spilled milk under the bridge. My trading career had just started then, I was just 19 years old and had no experience whatsoever.
Trading is like football. Read as many books as you can, watch as many matches as you can, you won’t be able to play unless you step on the field. Similarly, I read all the books there are on technical analysis, I know everything there is about trading and the stock market under the sun. But it doesn’t work like that. You need experience and a ‘feel’ of the market. You need to be in sync with the market and understand what it's trying to tell you with every passing second. If you just this one thing right, you’ll be the Michael Jordan of Trading. But if you don’t, you’ll be frustrated and in anger which will only lead to a domino effect on your losses.
The nadir in the life of a trader is executing a trade that you know won’t work. Sounds very bizarre and unreal but it happens. Happens with the best of us and mostly when you have lost everything and whatever that’s left seems trivial. Trading is a mental game.
“Trading is simple, but it’s not easy.”
Trading is addictive, for sure. It keeps your mind running and occupied at all times and you won’t even notice. You’ll be sitting with your mates and all you can think about is will Nifty50 open gap down tomorrow or, should you buy puts rather than selling futures. I mean, since the inception of electronic trading and HFTs, it’s not as frazzling as Mathew McConaughey describes in Wolf of Wall Street that one has to take ‘tootskis’ or indulge in manual simulation (ahem!) couple of times in a day, but it sure as hell doesn’t make your life as easy as you initially thought it would.
I took a long break from my trading practice. I was off the grid for roughly 2 months, clearing up my thoughts, doing my homework from before trading sessions, and meditating in the Himalayas! Just kidding! But I did take a 2-month break, with no exit date. My plan was to end it when I felt better and confident and ready. And so I ended it this weekend. I garnered up some money and a lot of courage for a fresh start. I took my first trade and I made some money. It was profitable. It was a small profit though but I wasn’t aiming for a big one anyway as all I needed first was a good start, a confidence booster. And with this trade, I woke up from my hibernation.
