Most of us do not have someone who can guide us when we start trading.

And there are a few very important things that every trader should know before they start their trading journey, but only someone experienced can give you those important lessons.

So, if you also don’t have any mentors, then this article is for you.

So let's deep dive into it, shall we?

Don’t force the market to give you money, It won’t.

One of the big mistakes that cost traders so much is treating markets like an ATM.

Most of them try to make money from the markets at will, but the markets don’t care, they will do whatever they have to do, going from phases of consolidations and trends.

After trading for many years, I realized that there are times in the market where you just have to go and pick up the money, yes it feels that easy.

But there are also times when the markets will test all your skills, it will hit you from all the ways possible,

So, what I’ve seen is during the rough period those who fight the markets (just because they have to complete their monthly targets) are the ones who take the biggest hits.

During that time the pros just watch the game sitting at the sidelines, that’s how they can keep their profits with themselves.

Understand this: Most traders can make money through trading in the short term, but most of them will give it back to the markets in the long run because of their “NEED” to make money.

But here people want action every day at 9:15, they don’t want to miss a single opportunity, and want to punch as many orders as they can.

IMO these people are just trading to “trade more” and not trading to make money.

Those who want to make money out of the markets, never hurry, they don’t set Profit targets, they just go with the flow, whether the markets give them 1% or 10% returns they are happy with it.

And when it doesn’t, they don’t fight with it, instead, they again wait for easy periods.

This is one of my favorite quotes from Lao Tzu :

“He will win who knows when to fight and when not to fight”

Discipline Is Everything.

You might be the smartest dude out there,

You might have a lot of money,

You might have a lot of experience,

You might have a great system,

But!

If you are not disciplined then none of the above things matter.

Most people think that trading is a technical game, and of course, it is to some degree, but you can’t win in this game with just your technical skills, what you need is a disciplined mindset.

The only difference between you and Profits is your discipline.

Though, most people know that to win in markets you need a strong disciplinary mindset, then why aren’t they disciplined?

The Feel-Good Hormone

Below is one of my favorite quotes on discipline:

“We must all suffer from one of the two pains: the pain of discipline or the pain of regret. The difference is disciplined weigh ounces while regret weighs tons.”

- Jim Rohn

Let’s take a look at an example so that you can relate to it better.

Say you bought a stock at 1000, and your SL is 980.

You have also recommended your friends over social media to buy the same stock.

The next day the stock reaches 1020, Now you have two options:

1. Sell now, so that you get a dopamine hit in your brain because you just made profits + you get to say “Maine bola tha” to your friends.

OR

2. Hold on to the gain, with the possibility of it turning into a scratch or a losing trade.

Which one would you choose?

The first one looks more attractive, right? As you get the short-term pleasure of having higher accuracy and you can also brag among your SM circle about it.

You get instant gratification by doing this, Just like you get from watching a Youtube video rather than reading a book.

But, let me tell you, that you feel good only for a short period, and just after some time, you get that awful feeling of why I did this?

Why I booked profits early, you can also relate with other things we do in our daily life.

And it’s not like people don’t know about this like everyone knows that for getting healthy you have to eat healthily and do some exercise.

But even after knowing this, How many people actually do it?

Well, the problem is that delayed gratification as the name suggests gives you results over a longer time.

Like you won’t find any difference in your knowledge after reading one book or an article or you won’t find any difference in your physique after doing exercise for one day.

But you will instantly feel good after watching some youtube video, or after eating some junk food.

This is the problem!

But, Let me ask you a question, can someone else make you exercise?

No, right? only you can help yourself get over this instant gratification sh*t, and focus on the longer-term results.

The best book for a trader is his trading Journal

Though there are 1000’s of books out there, and in those books, there are 100’s of different styles to trade the markets.

But, In my opinion, each trader is different and has to deal with different sorts of problems.

And your Trading journal gives you all the answers to your problems.

If you don’t know what a trading journal is, It basically contains information like why you entered a trade, Entry price, exit price, exit reason, average holding period, average gains, average loss, etc.

Which is very crucial info for a trader.

But, it looks like a very simple thing to do right? I mean how can this help in our trading?

Well, they say simple things work.

See, Until you don’t measure what you are doing, then how are you going to know where you are going right and where you are going wrong.

And until you don’t know where you are going wrong, how are you going to correct it?

Did you get my point?

IMO a trading Journal helps you in many ways:

1. It makes you accountable.

2. It helps you stay motivated during your rough times which every trader has to go through as you can see that over the longer term you are progressing in the right direction.

3. It helps you to find your faults so that you can correct them in time.

4. It helps you to know what you are doing right so that you do more of what’s working.

So, maintaining a trading journal is a must for every trader who is serious about making it big in markets.

One of the biggest benefits of making a Trading journal is that you get your emotions out of your head.

Especially whenever you have big losses or whenever you make any big mistakes, writing it down makes you feel a bit better, and you trade the next day with a fresh mind.

You can’t make money riding on someone else’s back.

There is a very thin line between learning from someone and then totally depending on them.

And I see many people falling into this trap of totally depending on another person for their trading decisions.

Let me assure you that you and only you, can help yourself make money, others can provide your knowledge and you can learn from them it’s totally fine.

But what is not fine is when you ask others about where to buy, where to sell, should I hold, should I book profits, what should I do now?

If you are asking these sorts of questions to others then you are going to get into big trouble, soon.

As you won’t consider yourself accountable for your trading decisions, you will blame your trading guru, your broker, your internet provider, your chai wala ;) for not giving the right kind of tip, basically, you will blame everyone but yourself for your losses.

So, learn from others but take responsibility for your trades, that’s the only way to survive in the markets in the long term.

Start Small

Most traders blow their 1st account in the first 2 years of their trading.

But, what matters is that if what they blew was 0.5% or 50% of their net worth.

The first category will be able to trade again and can try to improve based on their past mistakes and experiences.

But the second category which loses a major chunk of their net worth on the first try, might not be able to trade ever again! Because of financial and family pressure.

Though most of the traders on SM preach that you should have 20-30 lakhs in your account and only then you could become a good trader.

And it's definitely true to some extent if you want to go into F&O trading, but let me ask you a question.

Why do you want to do F&O?

If you aren’t able to make money without leverage, do you think it would be easier to trade with 4-5 X leverage?

If you are not able to make money going long, do you think you can make money shorting the markets?

Well, these are the things because of which traders choose F&O right?

Well, the main reason is the need to make money as fast as they can, as we talked about it earlier.

When I started trading, my dad gave me a piece of advice that

“Son it's going to take you at least 3-4 years perfecting this art with a lot of mistakes and troubles along the way, So start small, so that even if you do a big mistake it won’t feel that big, and you will gradually be able to grow in the markets”

At that time I thought I knew everything, how naive I was back then.

Well, there were at least 2 instances where I almost blew (did significant damage to the account ) my account during the first 2 years of my trading, but because it was a very small amount compared to our net worth I was able to survive it.

Understand this: “ Your experience will be of no use if there are no chips left to bet.”

Just don’t lose all your chips in the beginning, go small, make mistakes, learn from them, and then gradually you will be able to increase your trading size.

Nothing works all the time

Every system goes through times of Drawdown (losses) and also through times when it feels like “apun hi bhagwan hai”, where everything you touch turns in $. Just joking, LOL ;)

But most of us abandon our systems during the drawdown phase when the market is not suitable for our strategy.

And, we jump to a new strategy thinking that it won’t give us any losses, and again the same cycle goes on and on.

The problem is that people don’t understand that there are no free lunches in the market.

If you want the returns, then you have to bear the drawdown phase, No matter what strategy you choose.

The problem with most people is that they say that they can bear 15-20% drawdown, but in reality, they get worried after seeing 5-6% drawdown.

They have not internalized that 15-20% drawdown is going to be there.

And that’s the reason they start to tweak the rules or totally dump the strategy.

TL;DR

1. Never force the markets to give you profits, Wait for the suitable trading environments for your strategy and then hit hard, otherwise, the markets can take more than they can give.

2. Discipline matters the most in trading, even if all the other things are falling in place but discipline, then you will find it hard to stay profitable in the longer run.

3. A trading journal is a must for every trader, as it allows you to keep track of all your trading decisions.

4. Learning from others is good, but don’t run behind Tips in the name of learning, as they won’t help you stay profitable in the longer term.

5. Start small, as you are going to make a lot of mistakes in the initial years of your trading and your small account will allow you to make a comeback even if you make a big mistake.

6. Nothing works all the time, i.e there are no holy grail systems, each and every system will have to go through the Drawdown phase at some point in time, those who stick to their system during that period will win the game in the long run.

So, That’s it for today from our side, we hope that you learned something new from this article, please share it with your friends over social media.

Thanks for reading.