DON'T PREDICT THE MARKETS ,TRADE THEM!

Very often students ask me to predict the markets ( eg. what happens tomorrow with NIFTY?).

 No one can predict markets, No one!

Actually no one can predict anything in life.Except god men, astrologers, magicians and liars ( And I haven't seen many such rich people.)

Markets, however can be anticipated by using intelligence and most importantly can be traded to make money.

Trading is a process which gets over only when you successfully have the money out of the market and starts when you have the money in your account.Taking calculated decisions is what investing/trading is all about.


Similarly like, you can predict the bowler and the ball in cricket BUT you can 'PLAY' the ball.

Education and training helps the process.

Trading is very different from technical analysis (TA)- also called charting.It is a much higher concept of which technical analysis is a small part.

What, when, how much and what not to do after reading the charts is called trading.Adding, managing and removing money ( positions) from the market is called trading.

It is a dynamic process and changes with the market conditions.Its like playing chess with the markets and is amazingly stimulating on an intellectual level and greatly rewarding - financially and emotionally.

What differentiates charting and trading is the the emotional part. Physiology and cultivated emotional response mechanism is what either makes or looses money.

Trades/Investments have to be planned;TA is mere observation of the markets and to find out what is happening in the markets now ( as opposed to predicting the markets).

Once you know what is happening in the markets NOW with as much possible accuracy is that you can anticipate them.

Trading is the culmination of the following concepts.

 Hi risk reward ratio, demand supply, gamblers fallacy, Cognitive biasing, Inverse pyramiding, stop losses, Regression to mean, Martingale,.....

How many such do you know ......?

-CP.
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