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Buy Low, Sell High. Short high, Cover Low – these are the common words you may have heard from the people who are actively trading in markets. As they say, trading is nothing but Buy the dip and sell the tip. However, is successful trading that simple the way it sounds? Mind, Method and Money – This are three pillars of trading. Mind refers to trading psychology. Method refers to rules you set for deciding when to Buy/Sell and Money refers to money management. Let us go through one of these!
Mind refers to trading psychology. It is often said that if you master your emotion, you will master the market. The most common trading emotions which a trader would normally face are– Greed, Fear and Ego.
- Greed refers to desire to make big and quick money and that is why greed is worst enemy of the traders.
- Fear is defined as feeling of disquiet or apprehension. Fear generally comes from lack of faith in yourself or in your trading plan.
- Ego refers to a person’s self-esteem or self-importance. This is often a very important emotion that we see in traders.
Find out more about these concepts of trading in the Three Pillars of Stock Trading webinar brought to you by Imarticus Learning. This webinar is held by Mr. Vishal Kshatriya, a chartered accountant with over 9 years of experience in the capital markets. He currently heads Derivatives Research Desk in PCG Business at Edelweiss Broking.