Hi,
Hope you are doing well.
The next topic, before moving ahead, needs to be learned carefully. Your strategy has only 30% weightage, but 70% depends on your mindset.
Most people lose their capital because of this. We call it FOMO (Fear of Missing Out) — including me, as I’m also fighting this FOMO.
Let’s break down what happens when we try to enter into a trade, how our mind reacts, and what we feel before taking the trade:
1) Dopamine Effect in Trading
It’s like dopamine — you get satisfaction once you have entered into the trade. Then suddenly, you realize, “Oh! We did shit. Why did we enter?”
2) The Fear of Missing Out (FOMO)
The second thought that comes to mind is: “If I don’t trade now, the market will make a sharp move.”
Here’s what’s happening — we try to grab the money we don’t have, and during this hustle, we lose all the money we do have.
Ultimately, what happens? All the money is gone.
3) Losing Control and Breaking Discipline
I have seen this trait in myself — I make money initially but then start losing it. There’s no big deal in losing; it’s the nature of the market.
What you have earned so far, you are going to lose — until and unless you learn to control yourself.
When we start losing, I’ve seen (including myself) that we take one last trade, going out of our risk-reward ratio, and think, “This is my last trade; I won’t trade again.”
What happens when we enter the market with this thought? The market fulfills our wish — it takes all the money and throws us out.
4) The Misconception About the Market
Now people exit the market and say, “The market is like a daldal (swamp). Once you enter, you’ll never come out with profit.”
But that’s wrong.
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Final Thoughts
Hope you learned something valuable today.
Always remember: Your mindset is the real key to success in trading.
Thanks,
By
