Investment GuidesNote (opinion)

What do we gain by trading? A different answer


What do we gain by trading? You may be wondering why I had to ask this “ridiculous” question. Of course, people trade for profit, don’t they? but no. The answer to this question is far more complex and obscure than anything a novice trader might even think of.

Also, whether you accept it or not, answering this question is the first step to market success. Why? Because in the long run, only those who remain successful are knowledgeable traders (or those who are successful now because of this). Awareness means knowing your lofty goals and moving with the plan to achieve them. This requires knowing the potential benefits and risks of trading. In this article, I will focus on the sweet part of the equation: the benefits of trading.

This article is not an investment proposal and only conveys the author’s personal views.

Trading: A course of self-awareness

When you start trading, whether you realize it or not, you are enrolling in one of the most influential periods of self-awareness. Also, when you are an experienced trader, one thing is for sure: you will become more alert, purposeful and self-aware than ever before. You might think it’s a bit exaggerated; But quite honestly, the way you think will probably change. Of course, everyone’s personality is different, and some are naturally closer to the right mindset; But in general, most people are not comfortable with losing money by trading.

Controlling our inner selves and suppressing fear and greed are the most important aspects of trading. In trading, we need to look at opportunities as they are, not in the light of previous trades, your need for profit, or your fear of loss. The good news is that if you learn these skills, they will help you not only in business, but in all walks of life. It is no coincidence that big entrepreneurs are often more successful traders than others. Looking at options without being influenced by other things, as well as choosing the best outcome, is an extraordinary skill, and what all successful traders are aware of is that achieving this skill should be everyone’s number one goal.

Short-term gains versus long-term success

What do we gain by trading?
Short-term or long-term?

You may say to yourself that it is very good to reach self-awareness by trading; But when does the profit itself come about? To achieve this goal requires patience; Because over time, it becomes easier to understand whether or not you are successful in trading. If you make the usual profit in all situations, then you are successful; entire. In the long run, the market is very simple; But the powerful judge this.

You have to be careful about short-term profits, because examining the performance of trading in the short term is very daunting. Is [با اینکه تازه‌کار هستید،] Have you had astronomical gains and practically no losses so far? You may even think you are the new leader in the trading world. But in reality, your success has no basis and you have only had a chance for a while. To think that these successes are permanent leads to nothing but despair and regret. So the profit of trading when Real Is in the shadow of your plans and strategies. If you stick to these, you will succeed in the long run and if not, you will most likely fail.

The art of losing

What do we gain by trading?

A very successful trader once told me that the most important thing he has learned in his job is to make a loss. Broken trades are an integral part of this business, and coping with them is what sets successful traders apart. So one of your greatest achievements is learning this art; The art of losing. Accepting losses in transactions may seem simple; But the hardest part about sticking to a trading plan is the challenge: novice traders can’t afford to lose.

“Come back again…”
“I’m waiting for him to return to the breaking point.”

Are you familiar with it?

All traders experience the situation that when a trade becomes negative, we enter a phase of denial and do not want to admit that we have lost. Of course, sometimes luck is with you and the market really goes back to where you want it to be; But the important thing is that you acted against your strategies and plans. To lose a little is an extraordinary skill; But it is not art to prevent further damage.

Act on probabilities

Adherence to a trading plan requires objective thinking and the courage to accept uncertainty. Aside from the skill of losing, accepting the fact that nothing is certain can be another bargaining chip. Trading is a profession based on probability; Anything can happen.

This means that even with the best strategies and great order, some of your trades will fail; Something that is very difficult for our inner self to accept.

The problem with uncertainty is that people are generally “programmed” to avoid danger and uncertainty. Numerous studies show that even when a high-risk strategy has the desired potential outcomes, people still tend to choose a strategy that is safer and seemingly less risky. So it makes sense that if there is very little chance of a bear attack somewhere, you would rather not go there; Even if it has beautiful and delicious berry legs. In trading, mental loss is like a bear attack, which is a losing mentality.

Choosing the best results (with the highest probability of profit) will lead to success without listening to irrational fears. Once again, I emphasize that this decision-making process outside of the trading space will also help you and lead you to better decisions in work, business and personal life.

How does the system work and how can we use it to our advantage?

What do we gain by trading?

When you get to the point where you can follow a program and do whatever it takes, the fun part begins. You begin to explore patterns, familiar situations, and obvious opportunities. The financial system is very large and every day a huge amount of capital flows from one asset to another. This fact creates a lot of chances for the investor to use them for profit.

For example, the technical trends you analyze are often the result of capital flows flowing into an asset like a natural force. Are you ready to face a powerful avalanche, because the avalanche has covered half of the mountain? The same is true of trading. Are you willing to go against an uptrend, just because “it has grown so far”? By trading, you can achieve objectivity; The object that is needed to enter a process and stay in it until the end of the process. In fact, you should finally get to the point where you ride to the end of the path instead of standing in front of the avalanche.

On the other side of the coin are scalpels; Traders who trade on a daily basis and may only stay in the market for hours, minutes or even seconds. However, the general mentality is the same. They also see the opportunity, implement their strategy on it and follow their plan. Their work is also easy to understand, except that to identify and hunt for these chances, you must be prepared to act very quickly.

Trading vs. investing or trading or investing?

Knowing when we should not be in the market is one of the points that takes us from the trading space to the investment space. Even the toughest investors use trading skills to get out of their positions; However, some of them may deny this fact or not even realize it. Warren Buffett, a person who strongly opposes trading strategies, instinctively uses these skills when they are truly extraordinary. A famous saying is quoted from him: “Fear when everyone is greedy and be greedy when everyone is afraid.” This advice is a unique approach not only for investors, but also for traders in different timeframes. Warren Buffett also exits the market well when he sees a steady growth in his investments, which indicates that the market trend is nearing completion. This is another great skill that we are dealing with in trading.

In short, with an open mind, trading can not only help you with short-term profits, but also with long-term investments and investment decisions.

Financial independence: wealth creation

What do we gain by trading?

We come to the part where we talk about the middle ground. As a trader or investor, evolving and improving your decision-making, acting on probability, and adhering to a plan will open up a whole new dimension in your life. Once you become a successful trader, the savings you have made into working capital will grow and bring you and your family to your financial goals.

When you reach a level of skill and balance between a passive investor and a day-to-day trader, after all the achievements I have written about, the last achievement is wealth. This wealth, while dynamic, will be constant; Dynamic because given the skills you have, there is always the potential to grow, and constant because your decision-making process ensures that you make fewer stupid decisions. We have all heard of the “winning curse”; The winners of auctions that not only do not make a profit, but also leave the field with heavy losses. When we lose money in trading, it all comes back to the decisions we have made, the way we look at capital, and ultimately the lack of awareness. When you build your wealth naturally through successful trading, investing or any other type of business, you can always grow it; Even in the event of a catastrophe, it makes perfect sense. Your skill will be your real wealth, not money or property.

My final recommendation: Focus on learning skills instead of making a profit.

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