{"id":237,"date":"2017-09-13T16:56:07","date_gmt":"2017-09-13T11:26:07","guid":{"rendered":"http:\/\/charpaisa.com\/?p=237"},"modified":"2017-09-13T16:56:07","modified_gmt":"2017-09-13T11:26:07","slug":"psychology-matters-trading","status":"publish","type":"post","link":"https:\/\/charpaisa.com\/novice-trades\/psychology-matters-trading\/","title":{"rendered":"Why Psychology Matters in Trading"},"content":{"rendered":"
\"Trading<\/a>
How not to trade<\/figcaption><\/figure>\n

In case , you are not sure yet, Psychology matters in trading, a lot!<\/p>\n

After training for over three months, I took a trade today that violated all my trading rules. It was a no brainer. Don’t take that trade or take the opposite trade. I still took the trade.<\/p>\n

Let me be more specific here.<\/p>\n

I bought 200 shares of Chholafin<\/a>. It was call from one of the Gurus I follow. He is a genuine guy and his accuracy rate is also pretty good. It was an intraday trade. I bought at the first candle in the highlighted area. Let me breakdown as why it was a wrong trade to take:<\/p>\n

    \n
  1. The stock was in a downtrend. You don’t buy against the trend. There was no chance of it being a retracement as It was already near the bottom Bollinger band.<\/li>\n
  2. MACD was in the red zone. A perfect shorting candidate!<\/li>\n
  3. % B was in the negative territory. No one buys there, no one!<\/li>\n
  4. RSI was still not below 30, hence, it was not in an oversold zone.<\/li>\n
  5. No huge volume breakout.<\/li>\n<\/ol>\n

    So, according to the system that I use, there was no buy signal at all. Heck, I even hesitated buying it when it was at 1190. Then, it dropped to 1189. I thought, I am getting a better price, ignoring all the indicators. Greed took over. I rationalized, “That guy is a “Stock Guru”, he must know something that I did not.” And, I bought.<\/p>\n

    That guy admitted he was wrong and updated that I should sell, when the stock was trading at 1188. I hesitated. That would mean a loss of 200. It rebounded to 1188.45. I said to myself, “See, I was right to not sell”. Then on the next candle, the stock fell, forming a huge lower shadow, hitting my stop loss. And I was out of market.<\/p>\n

    My Learnings<\/h2>\n

    Why that guy who gave the call is a “Guru”?<\/h4>\n

    He was gracious enough to admit that he was wrong and got out of the market before it was too heavy a loss.<\/p>\n

    Why psychology matters?<\/h4>\n

    I let my greed over my rational thought process to take over while making the trading decisions. In fact, 3 out of 5 indicators told that it was a sell<\/p>\n

    I did not trust my own analysis.<\/p>\n

    I did not get out while there was still time to get out with a small loss. I could make my ego take that loss.<\/p>\n

    Trading is a discipline that requires huge mental strength and self belief. It build over time through experience and I hope today’s failure was a huge stepping stone for me!<\/p>\n

    Till next time, keep learning!<\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    In case , you are not sure yet, Psychology matters in trading, a lot! After training for over three months, I took a trade today that violated all my trading rules. It was a no brainer. Don’t take that trade or take the opposite trade. I still took the trade. Let me be more specific […]<\/p>\n","protected":false},"author":1,"featured_media":238,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[54,83,107,132,133],"yoast_head":"\nWhy Psychology Matters in Trading - Charpaisa<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/charpaisa.com\/novice-trades\/psychology-matters-trading\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Psychology Matters in Trading - Charpaisa\" \/>\n<meta property=\"og:description\" content=\"In case , you are not sure yet, Psychology matters in trading, a lot! After training for over three months, I took a trade today that violated all my trading rules. It was a no brainer. 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