{"id":13,"date":"2012-06-13T05:21:00","date_gmt":"2012-06-12T23:51:00","guid":{"rendered":"https:\/\/blog.fundsindia.com.cp-29.webhostbox.net\/?p=13"},"modified":"2013-04-09T13:16:13","modified_gmt":"2013-04-09T07:46:13","slug":"the-urge-to-trade-vs-the-urge-to-make-money","status":"publish","type":"post","link":"https:\/\/fundsindia.com\/blog\/uncategorized\/the-urge-to-trade-vs-the-urge-to-make-money\/13","title":{"rendered":"The Urge to Trade Vs The Urge to Make Money"},"content":{"rendered":"<p><span style=\"font-family: Arial,Helvetica,sans-serif;\">Do you get impatient when you see markets moving around and you don&#8217;t have a position?<\/span> Do you feel that the price is headed to the moon and you better buy now or you miss the opportunity of the lifetime?<\/p>\n<p>A little while later, do you get the sick feeling that whatever I buy falls and vice-versa?<\/p>\n<p><strong>If t<span style=\"font-family: Arial,Helvetica,sans-serif;\">he answer to this question is an overwhelming YES, it is your urge to trade which is a dominant force than <\/span>the urge to make money. <\/strong><\/p>\n<p><strong>\u00a0<\/strong>Most traders lose money primarily because of chasing price or getting impatient and taking a trade at an unfavourable trade location. You must have a trade plan and more importantly you must trade the plan.<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: Arial,Helvetica,sans-serif;\">On interaction with numerous traders and market participants, I get the feeling that the Urge to Trade is a dominant psychological force and t<\/span><span style=\"font-family: Arial,Helvetica,sans-serif;\">o cater to this urge, the trading community is flooded with recommendations in various groups, forum,\u00a0online messenger service and of course mobile text messages, Tweets and what not! <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: Arial;\">It would not be unreasonable to say that a trader, on any given day, is often flooded with an average of 10-15 calls through various avenues.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: Arial;\">Given that there is a finite amount of trading and more importantly <span style=\"text-decoration: underline;\"><strong>emotional capital<\/strong><\/span>, should the trader not exercise caution while choosing the trades\u00a0that needs to be acted upon?<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: Arial;\">Ponder over this question and\u00a0Introspect.<\/span><\/p>\n<p>Let&#8217;s address the key question of How does one decide which are the trades to take or ignore from the abundant flow of recommendations from various sources.<\/p>\n<ul>\n<li><em>The first obvious filter is the quality and consistency of the source from which the recommendation is dished out. If you come across a person or an entity that has been consistent in terms of accuracy, then the calls from that source takes precedence.<\/em><\/li>\n<\/ul>\n<ul>\n<li><em>Once you decide the recommendations that you are interested in, the next and the criritcal\u00a0 filter comes into play which is Risk-Reward. <span style=\"text-decoration: underline;\"><strong>Concentrate on the trades where the risk-reward is 1:3 or better. <\/strong><\/span><\/em><\/li>\n<\/ul>\n<ul>\n<li><em>And, if there are too many trades satisfying the1:3 risk-reward metric, use the next filter which is affordability as well as percentage returns. Choose the trades that offer better returns in percentage terms.<\/em><\/li>\n<li><em>If none of these filters work, then just don&#8217;t trade. Period.<\/em><\/li>\n<\/ul>\n<p><span style=\"font-family: Arial;\">Please control your urge to trade. It is not about always being in a trade or how many trades you executed during the day\/week or month; it is all about making money and the profits that you take home. Nothing <\/span>else matters.<\/p>\n<p>Hope you find this post informative.<\/p>\n<p>Cheers<\/p>\n<p>B.Krishnakumar<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Do you get impatient when you see markets moving around and you don&#8217;t have a position? Do you feel that the price is headed to the moon and you better buy now or you miss the opportunity of the lifetime? A little while later, do you get the sick feeling that whatever I buy falls [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[59,1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Urge to Trade Vs The Urge to Make Money<\/title>\n<meta name=\"description\" content=\"On interaction with numerous traders, I get the feeling that the urge to trade is a dominant psychological force than the urge to make money.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fundsindia.com\/blog\/uncategorized\/the-urge-to-trade-vs-the-urge-to-make-money\/13\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" 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