General Money || Personal Finance || Stock Markets || Real Estate ||
What does a Stock Trader do?
A stock trader watches the market and manages monetary investments in different stocks. These professionals may engage in different types of stock trading; from day trading, momentum trading or market making, to trend following, arbitrage, and trading the news.
One of the main responsibilities of the stock trader is researching the stocks they are interested in trading. There are different types and philosophies behind company stock research, known as technical, fundamental and general market environmental research. Trading professionals may choose to use one or a blend of these types of research methods.
The goal of researching stocks is to cut the element of risk and make higher profits from their investments through trading disciplines and insight into the companies as well as external market factors. As mentioned earlier, winning is only a probability – to get this probability right, an ideal trader braces oneself to constant reading as a habit.
Now, what is the general mindset of a trader?
Remember – “Money is the OUTPUT of the game of trading and not the PURPOSE. “
Lets understand the psychology of a trader. There is a difference between OUTPUT & PURPOSE. Money is the OUTPUT of the game of trading and not the PURPOSE. If money will become purpose, a trader cannot keep himself motivated when he would have a streak of losses. If money will become the purpose, how cannot remain motivated to trade even after earning a lot of money. Why is Warren Buffett still in the business, if money is the PURPOSE? Why is Ed Seykota still trading if money is the PURPOSE? Why is Amitabh Bachchan still working so hard if money is the PURPOSE. If money is a trader’s PURPOSE, no one can save him from being bankrupt in this business. Not even this, a person with money as a PURPOSE will not succeed ever in anything. Let me tell you why.
Learning to trade will take years and during those years, a trader might not make money. Plus he would have to study for uncountable hours, sacrifice his sleep, family time, leisure time to study and that too without making money for a long time. So, how would one be able to do that if the purpose is MONEY? Same with anything in life. If somebody wants to be a cricketer, it will be because cricket is his/her PASSION and not because he would get a lot of advertisement contracts when he would become a cricketer and would make a lot of money. Because being a successful cricketer will mean hard-work for uncountable years without money. It will mean working very hard without anything in return. And even then one might not succeed. So trader must always get his trade perspective right, motive right & this should be the true mindset of a professional trader.
– source, inspiration in the above note on Mindset of a trader – courtesy Nishant Arora, Techno-funda Society.
What is risk appetite & is it so important?