I was speaking to a friend of mine who is trying to make money for living by trading. He told me over a beer that he has been making more money whenever there is a cricket match on TV!
mmm…I asked him “That’s really interesting! What do you do different on the days you watch cricket?”
I noted the following points after speaking to him about his day on a cricket match! Let’s call him a “Trader” for our sake.
- Whenever there is a cricket match, Trader does his home work a day early and since he cannot watch CNBC thru out the day, he makes uphis mind on only few calls. He just doesn’t have time to monitor these calls thru out that day.
- Trader not only takes few calls on the cricket day, but he also watches CNBC less, monitors his positions less frequently and worries less about his positions on the trade. He just keeps his stop-loss and forgets about his trade.
- Since Trader takes one or two trading calls on cricket day, he usually spends sometime on analyzing and picking the best ones among all his possible trading opportunities( note this point).
- Trader not only is less bothered about his position on trade but aslo more relaxed about his trade because the game takes all his attention. Watching cricket gives him joy!
Let’s looks at what he does on days there is NO cricket!
- He promptly gets ready for the market opening and switches on CNBC and keeps note of every analyst call
- He trades more frequently because there are more tips available on CNBC.
- He is hooked on to the PC monitor and he watches his positions tick by tick and he usually gets worked up every time his position goes up and down.
- At the end of the trading day he is drained and tired. He just managed to break even or lose a little but he feels like he has won a War.
Can you see the difference here?
If you can’t, let me tell you loudly …If you are one of those traders who take trading calls based on TV analysts then you lose often and you live in hell as a trader. If you don’t enjoy and relax while you trade then you are probably not making money!
Where do traders lose more money on their trading? I can tell you without blinking. It’s on tips! and mind you! Every trader typically wants these tips for free. Now c’mon…this is basic human nature and even more so, a trader’s nature.
Few years back one independent research study pointed out that traders lose more money on tips than anything else. It’s so strange for me because you are willing to trust an analyst on CNBC more than you can trust yourself. There is a reason for it. Most traders never invest in learning! They are more than happy to find a short cut to make money.
Now here are characteristics of a Successful trader or Investor.
- Successful traders invest in learning, while they may start with listening to others, over a period of time they learn to have an opinion.
- Successful traders do watch TV, read blogs, take tips- But they never take a trade unless their own trading system rules are met! ( The most Important point)
- Successful traders first important investment is always in tools, software, hardware, books, training so that their investments pay them everyday!
- Successful traders always takes responsibility for their trades and they learn from their mistakes quickly
- Successful traders often make new mistakes but usually avoid repeating old mistakes again!
- Successful traders are least worried while trading because they know taking a loss every now and then is a way of life
- Successful traders are more relaxed because they know their risk management well.
Just take a little bit of time and ask yourself…Is watching TV during trading hours influencing your trading? Then do something about it. I am not against watching TV but I am against getting influenced. May be you are taking trades based on someone’s opinion and your money. It ain’t that smart a thing to do…ha.
Have a nice weekend and great trading week ahead.