• : August 29, 2021
  • : B. Krishnakumar
 
Fear of Missing Out - III
 
In the previous newsletter, we discussed the FoMo driven trades for instrument traders. Let us address the same concept and how it affects the psyche and performance of pattern traders or the ones who trade a wide basket of stocks.

The common problem here is the search for “the best” scanner or “the best” pattern which does not exist. Obviously, the pattern or the scanner you use would identify interesting winning candidates, but it need not capture all winning stocks or instruments. It is essential to realise that this is totally fine.

If there is one message you want to take away, it is this:

“You cannot identify and participate in all winning stocks. And what is more important is that you need not identify all winning stocks to make tons of money. The actual money is made by the positioning sizing”

Having been in the markets for a long, I can say this out of my personal experience and through interaction with hundreds of new and experienced traders, that the typical problem is we are always unhappy with our approach and get influenced by the winning trades of fellow traders.

This leads us to constantly look around for something new or better. If you have this mindset, you are unlikely to make money for sure. I can say this because your focus has drifted away from making money and is directed towards searching for the non-existent Holy-Grail.

So, as always, identify and execute your trading approach for at least 100+ trades or 6 months whichever happens later. The idea is to make you develop conviction and confidence in your system which happens only if you stick around with it both in time and trades perspective.

Once you have developed this confidence and conviction, you will automatically gravitate towards taking bigger bets and that is the path to building wealth.

Try this approach and you can thank me later.