Myth of a Holy Grail
Published by Sharekhan Education | April 17, 2020
Needless to say, I had to pay heavily for the mistakes I made. Amongst the many myths that I had, one of them was my unending quest for a search of a holy grail!. I wasted time searching for the perfect indicator or strategy that would never fail me in trading. In short a strategy which should work 100% of the time!
Gradually , as I understood this business better & started interacting with the experts in this business I realized a very simple yet valuable fact & that is trading is a “probability”game in which you have to ensure that the “odds” are in your favour as far as possible.Also, it is not the number of trades going right that make you money ,but it’s the amount of money you make on the trades that maters. For example, if I take 5 trades with a risk of 1000 rs per trade & aim for a reward of thrice my risk ( i.e 3000 per trade) even if I go wrong 3 out of 5 times I swillend up making decent money.
Example –
Trade 1 – Profit – Rs 3000
Trade 2 – Profit – Rs 3000
3rd Trade – Loss – Rs 1000
Trade 4 – loss – Rs 1000
Trade 5 – loss Rs 1000
Reduce brokerage & transaction costs, and you still end up making money! Understanding this changes the game: It’s not the strategy that makes money, but the money management. You should always have a strategy to minimize risk and maximize reward with each trade.
Understanding this becomes even more critical in today’s world, because in today’s world with rapid advancement of technologies it’s easy to fall prey to the advertisements which promise “100% accuracy ” on each trades , or sophisticated software to do the work for you. Even with advancements, humans can never replace machines in trading decision-making.
Next time you change your trading strategy after an unsuccessful trade, ask yourself: Are you chasing the Holy Grail?
Good news is, you don’t need a Holy grail to succeed in trading . All you need is a proven trading strategy with consistent track record across different market cycles. At harekhan Education, we teach Demand & Supply to tilt the odds in our favor with every trade.
By Enrolling yourself in this stock market course, you can learn the basics and the various aspects of trading.
Trade well & trade safe
