General Money || Personal Finance || Stock Markets || Real Estate ||
What does appetite for risks mean & why is it so important for being a trader?
When ever i mentor new aspirants who takes a plunge into trading, i usually ask these question. Do you really believe you can take risk that comes along with the trade? Have you really accepted that the trade has a non-guaranteed probable outcome? Have you fully accepted the possible consequences? Well, most often i get ‘Yes’ for an answer, which i am used to hearing.
Now take a minute – analyse your risk real appetite in being a trader on these lines. Remember – the best traders not only take risk, they also learn to accept & embrace that risk which they take. Mind you there is a huge ‘psychological gap’ between assuming that you are risk taker because you – put on trades & fully accept the risks inherent in each trade. When you fully accept the risks, it will have profound implications on your bottom line of thoughts.
What i mean to stress here is – The best traders can put on trades without quite a bit of hesitation or worry & admit it openly if it doesn’t work their way. They get out of the trade – even with a loss – and even by doing that their mindsets don’t show even bit of emotional discomfort. They do not loose their discipline, focus or sense of confidence. Now this is exactly why i say – when you are unable to trade without slightest bit of discomfort – that means you still haven’t accepted the real risk that comes with a trade.
Now what happens when you don’t accept – the proportionate of not accepting risk – is equally proportional to the same degree that you will avoid taking such risk again in future & you will let your emotions rule your trades forever. Repercussions – You will either get out of winning trades too soon with little profits or you will obviously start keeping your stop losses very close to your entry point, which will eventually get hit on most trades.
Remember market is always neutral – its the emotions which are at play that triggers a buy or a sell in stock markets or in any other business. Loosing money & being wrong against the market – is an inherent clawback which you must accept it – not with just words – but with wilful mindset that should become one’s attitude towards life & trade.
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