The secret book by Rhonda Byrne is my all-time favorite book the law that is governing all lives and offers the knowledge of how to create intentionally and effortlessly a joyful life. And yesterday I came across another book, Law of Love. An immediate thought came into my mind, why I shouldn’t write something related to investment and trading. So here is my first blog of LAW OF SUCCESSFUL TRADING.
Law of successful trading.
Few years ago I was working as a financial planner for a firm, guiding clients to invest based on their goal and duration was my job. Most clients used to visit me at the office on a quarterly or half yearly basis, but for some HNI clients I had to visit at their places.
One day I visited one of my clients at his place, he has active investment on Mutual funds, Gold, real estate and long term investment on Equity while reviewing his investment at his home I found plenty of books regarding successful trading, tips, trading strategy and he also had multiple monitors for trading setup.
When asked, he replied he is doing some research on stock market movements and he surprised even more by saying he is doing it since many years, he also showed all his paper works, theories, observation notes,
“He basically trying to find the Holy Grail”
He wanted to tell me he is breaking the code on how and why stock prices move and if it moves till what price it will move so that he can enter and exit with profit. During this period he lost close to million rupees, in trading
I explained to him,
Sir, can you imagine the consequences if holy grail was found, no one actually knows what is holy grail, it could be the cup used by Jesus in last supper or it could be bowl used to collect the blood of Jesus but if the cup was found it is believed humans will become immortal and total enlightenment and this will be the greatest treasure hunt of all time, and the consequences will be terrible if no one actually gets old or falls sick and dies.
This is what happens if you find the secret or break the code of stock market movements, if it becomes very easy to make money in trading, no one actually goes to work anymore, everyone will be rich and there will be no economic cycle and everything will be total disaster
Hope by now you understood the fact
- There is no trading strategy which will book profit in 10 out of 10 trades every time.
- Sometimes your trade position hits SL
Here is the key to becoming a successful trader.
To be successful and to earn a living from trading you just need 5 out of 10 successful trades and to become rich you just need 6 out of 10 trades.
A trading system with money management for 3 to 1 win to loss ratio, so you can profit 7 out of 10 trades and a trading system with 2 to 1 profit to loss ratio so that you can earn $2 for every $1 you risk