Excitement. Euphoria. Despair. Confusion. The kind of emotions we commonly see new traders experience. Often, most continue experiencing these kinds of emotions for a long time. And this leads to the belief that trading is an exciting world. A world that slowly encourages a win-big or lose-big mentality. Typically, beginners believe that trading as a profession is exciting and non-monotonous.
But let me tell you the harsh truth. Trading is boring. Yes, I repeat. Trading is one of the most boring professions in the world if practiced correctly.
But why is it boring? Simply because trading is mainly executing your strategy step by step in a repeatable fashion. No distractions, no noise, and certainly no rush of adrenaline.
Before moving ahead, let us see some of the common beliefs of beginners.
- Trading is easy, I only need to punch some random buy/sell orders and enjoy
- I only have to take my trades after some recommendation is given on TV/social media
- I will invest more than 20% of my capital in a single trade, and I will make more money
- I will apply multiple (more than 3-4) indicators on my charts, and I will get more clarity
- I will try to combine all the information/data out there so that my analysis is perfect
If you are trading for fun or for some extra income, while your main source of income is huge, then you might get away with the above-mentioned mindset. But, if you are someone who wants to stay in this market for a long time and that too profitably, then please understand that trading is a boring profession. It is loaded with planning and executing via a monotonous routine.
Here’s why I say that trading is boring.
- You will most likely analyze a set of 10-20 selected stocks
- You will likely use only a couple of indicators or patterns
- You will have to be extremely cautious about position sizing
- You will stop your search for a perfect strategy
There are a lot of traders who only trade NIFTY and BANKNIFTY instruments daily. They don’t even take positions in any stock for their daily income. They simply take trades in these couple of scripts. That’s all. Moreover, they use simple systems, i.e., either price action-based or volume-based, or indicator based, and they don’t try to combine everything. For them, the key is simplicity, repeatability, and scalability, in addition to the speed of execution, risk management, and position sizing. Basically, this approach is devoid of any thrills. Hence, trading is considered boring by professional traders.
So, what should a new trader do?
- Study first and find a strategy/system that works for you
- Stop looking for a holy grail strategy
- Have balanced position sizing
- Keep risk management in place (target, stop-loss, etc.)
Most importantly, understand that over the long term, trading is similar to other professions where you have to do the same thing day in and day out. To achieve success, you will have to show up continuously and place your trades.
Hence, if you are coming here for the excitement, then possibly this is not the right place. Trading and excitement do not make a happy couple.