Is Trading not my cup of tea?

As far as the articles I have read, nobody has spoken about the pains of trading as Dr.Brett did, in his blog. After reading that blog, I need to ask myself this question lot of times...

Is trading not my cup of tea and it is something else??

A comment in that post reads - the prob with all the newcomers is, that they are "overmotivated and undercapitalised". This can't be further from truth but people like me are finding it difficult to accept the harsh reality. I guess only when we accept the reality and do the following one can say trading is my cup of tea

I need to imbibe in myself the following beliefs about trading

* Treat Trading just like other business and become the sole entrepreneur.
* Accept Losses and treat it like losses in business
* Set proper targets not just stops
* Do trading with utmost discipline and money management and even after that you are not winning, accept the fact that trading is not your skill.

I am trading. But am i doing with all the above qualities? The harsh answer is no at this point.

Another link from blogosphere which talks about ineffective trading habits. Please scroll down the page in this link to find 7 habits of ineffective traders. After reading this i could list my mistakes.

* Not following stop loss all the time
* Keeping the positions open until expiry
* Not setting the targets according to day trader - 20-30 points or depending on the market

The thing is that i am keep on doing the same mistakes and as a result facing failures. Every time i fail i am pushing some more funds into trading a/c. I have to take a decision of not to push more funds into trading account until i see some meaningful improvements in my winning trades.

By rectifying the above mistakes and practizing trading for the rest of the year, i hope i can say a confident yes/ no for this question

Is trading not my cup of tea?

Lets wait till End of December 2009 to find it out!

Discipline

It is the foremost thing in trading if you need profit from the markets. Even though i learnt a lot about it from the book - ' Trading in a zone', I hardly used it in the past. I was irregular and didn't set the stoploss trigger trade at any point of time. The result is that at some point one will lost whatever earned. I was not disciplined and i lost all the money i earned in the last 5 trades!

I did a short in Nifty at 4464 and did the following mistakes

* Didn't follow the stop set at 4482 for intraday - NIFTY Closed at ~4525
* Inspite of my decision to do day trading, i carried the positions
* Made a new decision to wait until the expiry of july series (around 7-8 days to expiry)

After this Nifty went to as high as ~4615 in the next 3-4 days. But one day before the expiry NIFTY did a nose dive and came to as low as ~4420. I was watching the trading screen as NIFTY was trading at 4430-4440. I didn't square off. At that time i became greedy and was expecting 4390 in the NIFTY. So i didn't square off the position and left it as such and in the next day NIFTY expired at 4571.45.

So a loss, because of not following the discipline. Even though the markets showed signs of strength in the last 2 days, i didn't square off and was waiting that NF will fall inspite of all signals showing strength. I avoided the signals for most of the time, as i hoped that it will FALL!!!

As said in the book - Trading in a Zone, we will always look for signals which are augmenting our position and not for signals which we always look when we enter into trade or what we call as our edge!! All those were opposing and i didn't look and i took a loss of a magnitude that erased my profit that i got in last 5 disciplined trades

I have to understand that in a stock market everybody gets loss. Even the best will face loss. But greatness is determined by how long you stay wrong. I have to learn this lesson and move forward. This quality along with other distinguishing quality of great traders is discussed in Dr.Bret's blog post.