Random Nature Of Markets Is A Good Thing

Trading depends a lot on mindset, how you think.

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The random nature of markets could be unsettling sometimes.

The idea that one single event can liquidate your account is somewhat chilling. It isn't a fun thing to think about. But it's true. At any moment, a random event can completely wreck your account.

Usually people take random events as bad sign. They want to be absolutely certain about what's going to happen in the future.

When you crave for certainity, when you want to be right every time, that's when you fail the most.

Every moment in the market is unique. You can try to predict. Play with the probabilities, but can never be sure all the time about what is going to happen.

Post-Traumatic Growth

An entrepreneur, after failing in his first startup, grows a lot. The stress of failure fuels the growth. People usually focus on the negative impact of randomness and disregard the positive.

Embracing randomness is better than fighting it. The general illusion is that randomness is risky. Most people want stability in their life. They want to eliminate randomness completely.

But trading means you play with random events. You make mistakes. You learn from your mistakes so that you do not repeat the same mistakes again.

The more you fail, and if you sustain, the more you will understand the nature of market. It's randomness. And the more you will grow.

The idea of post traumatic stress is to build your character through experience. No one likes losing money. It impacts your mood. Your emotions.

You are not only risking your money while trading, but your emotional stability. The fluctuations in the price makes you happy, sad and angry.

Coping with these emotions again and again, will make you strong, or weak. It depends on how you take them. Whether you use them as a fuel for your growth or to burn yourself down.

There is a big difference between predicting and executing trades. Predicting doesn't drains you emotionally and mentally. Executing does.

Predicting is just thinking about what market might do. But it takes confidence and discipline to execute the trade.

Trading is like playing chess. You anticipate all the possibilities and make your best possible move.

When you are wrong, you don't give up. But you quickly admit that you were wrong. Then you make the best possible move. Try to salvage and win from what's left.

Every decision is important

We take decisions lightly, but every decision is important. In life, if you make a wrong choice about your career, you will struggle for a long time. If you make a wrong decision about your life partner, your married life will struggle.

If you make a wrong decision while trading, your wealth will suffer.

With every wrong decision, you lose a bit of confidence.

So, be slow while making a decision. But when you decide, stick with it. Unless you are proved wrong, don't change your decision. Changing your conviction again and again will weaken your confidence. You will end up confused about what to do.

Once you make a decision, be carefree. Being carefree doesn't mean being euphoric. It means being confident. You are confident about your decision.

And once the market makes money for you, you pay yourself. You don't risk it again for more money.

Consider an uncomfortable option

Usually people prefer taking the easier choices over the hard ones.

But in the long term, hard choices are the ones that improves your life. Letting go of wrong people around you, moving on from a bad phase, getting a low level job after being unemployed. All hard choices means growth in some way.

Similarly, in trading, hard choices like cutting your losses. Letting go of a loser bag are the ones that makes you survive in the market for long enough. Long term survival means more chances of winning.

Decisions are not permanent.

Just because you have decided something doesn't mean that you can not change that decision ever.

Usually, people make stupid decisions because someone else thought it was the right thing to do. When I started trading, I used to act on other people's call from twitter. As a result, I incurred heavy losses. End up holding bags of altcoins that never pumped. It was really frustrating.

You can always revisit other options. Chose to get out at any time. Don't wait for others to tell you what to do.

If you are wrong about your decision, be sure to admit it, and change your decision.

It's better to admit to being wrong than to stick to your ego and be wrong forever.