Sunday, January 16, 2011

Trading Will Be Just Like Gambling Without A Plan

A gambler goes into a casino and put bets on various speculative games to win multiple times of money which is being put at stake. There is no plan behind such gambling and it is just a sheer test of one’s luck in winning money. The odds may favour one day and the other day might go against.

Similarly if a trader starts trading in the money market without any basic planning then he/she could be easily equated to a gambler. Trader for being called a successful trader has to compulsorily shed the gambling instincts. Luck can favour trader and bring good money at times but this is not bound to happen always.

Trading in Stock markets need lot of hard work in making a successful trading plan and strategy. Considerable amount of time is needed in researching and concluding a trading plan for oneself. One style of trading is not necessarily appropriate for everyone and so an individualistic approach is needed to chalk out a strategy which best suits a person.

Lot of factors like available trading capital [disposable extra money], emotional stability, risk taking capability, understanding of one’s own needs and expectations, understanding of money management techniques, psychological aspects etc. go into developing a trading plan.

Trading should be treated as a business and not like gambling so just like any other business trading should also be based on sound financial planning and money management techniques. It has rightly been said that Plan your trades first and trade according to your plans.


Evel Knievel “ Risk is good. Not properly managing your risk is a dangerous leap”

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Required US Government Disclaimer & CTFC Rule 4.41

Futures trading contains substantial risk and is not suitable for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only consider risk capital that should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. CTFC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS SUCH AS LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. All trades, patterns, charts, systems, etc., discussed in this website or advertisement are for illustrative purposes only and not construed as specific advisory recommendations. All ideas and materials presented herein are for information and educational purposes only. No system or trading methodology has ever been developed that can guarantee profits or prevent losses. The testimonials and examples used herein are exceptional results which do not apply to average people and are not intended to represent or guarantee that anyone will achieve the same or similar results. Trades placed on the reliance of Trend Methods systems are taken at your own risk for your own account. This is not an offer to buy or sell futures interests.