By Kelvin Yap, founder of Round & Surge
I had lunch with one of our member, Kent yesterday. His objective is to become a full-time trader so that he can spend more time taking care of his family. I am sharing my past failure experience as a full-time trader with him so that he won’t repeat the same scenario. I always like to share my failure with some traders with the hope that they can learn from my mistakes to speed up the learning journey and reach their trading goal sooner. One of the famous quote from Jack Ma when he was asked about the point of view in MBA courses, “Instead of learning from other people’s success, learn from their mistakes. Most of the people who fail will share a common trail (to fail) whereas success can be attributed to various kinds of reasons.”
We start a conversation about retail traders mindset. One of the most exciting topics that we have discussed is about trader’s objective in the stock market is to make a profit. But many of the trader’s mindset is not heading in the right direction. They are just looking for excitement and hope to be able to choose the right stock that can give them profit almost immediately. Most of the time, this kind of traders will end up losing more. It is because they had put their high expectation into the market and wish to hit one time like winning a jackpot, instead of listening to the market and trade accordingly. In this case, there is only one outcome; they will hit the one-time jackpot but holding a few losing stocks which the losses too massive to be covered by the winning amount. Since they are losing, why do they continue doing it?
Hitting the jackpot makes them feel excited, and the satisfaction of the winning enough to blind them from the real losing situation. You can call this group of traders, a gambler. When they hit the right stock, they are happy. But when they choose the wrong stock, they will change their strategy into investment mindset, which holds it for the long term and finds a million reasons from the web to support their thought that losing stocks is worth to invest or to collect dividends in the long run. Between this conversation, another famous quote by George Soros strikes into my mind, ” If investing is entertaining and if you are having fun, you’re probably not making any money. Good investing is boring.” So ask yourself, are you a gambler who is always looking for star stock pick or are you boring every day due to repeating same method trading routine?
If you are looking for one-hit wonder kind of excitement, trading is not for you. We believe real traders react to the market and we strive to achieve consistency in our trades. I assume that some traders will still try to convince themselves that they are not gambler after reading this. The numbers will never lie, look into your trading result, are you consistently making a profit every month? You know your answer.
Stock Market = Gold Mine, but do you know how to mine?