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For all stock market enthusiasts.
A (thread):
A (thread):
Let’s say you’re talking to a friend & got a stock recommendation.
It’s the XYZ Company. There’s some really good event happening tomorrow, which should drive the stock price up.
You’re excited; you go home, check your savings account & notice there’s only ₹20k,
for emergency.
It’s the XYZ Company. There’s some really good event happening tomorrow, which should drive the stock price up.
You’re excited; you go home, check your savings account & notice there’s only ₹20k,
for emergency.
The rest is invested in FD & PPF which is locked-in. You’re wife is going to kill you if you touch it.
You look for other assets in your house & notice there’s your wife’s jewelry that you can use but you have a dinner party this weekend & your wife will need it.
You look for other assets in your house & notice there’s your wife’s jewelry that you can use but you have a dinner party this weekend & your wife will need it.
You decide to use that ₹20k.
You check the stock is selling at ₹200. You do the math, you realize you can get 100 shares.
Just 100 shares!!
And then you remember some of your friends talking about margin facility. So you decide to use some margin.
You check the stock is selling at ₹200. You do the math, you realize you can get 100 shares.
Just 100 shares!!
And then you remember some of your friends talking about margin facility. So you decide to use some margin.
You call the broker, he gives you 50% margin on intra-day.
So now, you can afford 200 shares.
You buy it, you wait patiently
Your stock is floating around the buy price currently.....
So now, you can afford 200 shares.
You buy it, you wait patiently
Your stock is floating around the buy price currently.....
Suddenly you notice something else. The stock is going down; you’re losing money.
In fact whole market is down.
What the hell is happening?
You decide to discover. You Google.
Finally you identify the reason.
It was Donald Trump's tweet:
“I will make sure China pays the price.”
In fact whole market is down.
What the hell is happening?
You decide to discover. You Google.
Finally you identify the reason.
It was Donald Trump's tweet:
“I will make sure China pays the price.”
The market closed at 3% down.
Your trade is auto-executed; with a loss of ₹1200.
Instead of China, you paid the price.
You can't blame your friend. So you blame the market to never return again.
Guess what!
Next day, that stock is up 5% & you’re sitting with ₹18,800 now.
Your trade is auto-executed; with a loss of ₹1200.
Instead of China, you paid the price.
You can't blame your friend. So you blame the market to never return again.
Guess what!
Next day, that stock is up 5% & you’re sitting with ₹18,800 now.
My 2 cents:
The difficulty of trading is that you need to be absolutely right about two things: -
• The underlying bet
• The timing
Even if you're right about one, you can still loose.
The difficulty of trading is that you need to be absolutely right about two things: -
• The underlying bet
• The timing
Even if you're right about one, you can still loose.
Why has stock market got a reputation of glorified gambling?
There's no such thing as 'Something for nothing'.
Gambling instinct has driven millions to failure, not only in markets, everywhere.
There's no such thing as 'Something for nothing'.
Gambling instinct has driven millions to failure, not only in markets, everywhere.
There’s nothing wrong in being a trader, but I doubt if there's anything called as ‘part-time trader’.
You can't play around in the markets during your lunch break and expect to earn more than the full time technical analysts.
You can't play around in the markets during your lunch break and expect to earn more than the full time technical analysts.
This is why there’s an unwritten rule of trading.
"The 90/90/90 rule."
90% of new traders lose 90% of their money in the first 90 days.
"The 90/90/90 rule."
90% of new traders lose 90% of their money in the first 90 days.
Let's say you've worked hard & you’ve become a good trader.
Congrats!
Finally, you’ve found yourself a new job.
With everyday a new battle to fight.
Congrats!
Finally, you’ve found yourself a new job.
With everyday a new battle to fight.
How many trading “experts” have you seen who are teaching trading for a living?
If they know where the gold is, why don’t they dig it themselves, instead of selling shovels?
Because they know the risks involved. https://twitter.com/invest_mindset/status/1294977564469948416
If they know where the gold is, why don’t they dig it themselves, instead of selling shovels?
Because they know the risks involved. https://twitter.com/invest_mindset/status/1294977564469948416
There’s true freedom and there’s illusion of freedom.
If you can’t choose where you’re going to be tomorrow at 9:30am then you know which one you have.
If you can’t choose where you’re going to be tomorrow at 9:30am then you know which one you have.
As an individual, we dream for true financial freedom.
Freedom from constant worry of money.
A truly passive source of income with minimum involvement.
That's what long-term investing does. You also get dividends that fattens your wallet.
Freedom from constant worry of money.
A truly passive source of income with minimum involvement.
That's what long-term investing does. You also get dividends that fattens your wallet.
Stock market is by far, the best place to take advantage of the power of compounding; still majority choose to ignore it despite having the money and the platform.
It’s important to look beyond the hype & understand what’s involved, including the effort/reward and most importantly the risks/reward ratio.
Start learning the process of successful people instead of just following their outcomes.
Start learning the process of successful people instead of just following their outcomes.
