Most people enter the Equity market with enough theoretical knowledge, little experience, and plenty of expectations. But
Most people enter the Equity market with enough theoretical knowledge, little experience, and plenty of expectations. But reality teaches a very different lesson. The lesson is so hard to learn that most of them quit halfway.
The expectation trap is the most dangerous one to handle. Retail investors have the impression that "The Equity Market is a Money-Making Machine". Thanks to the fake profit and loss screenshot (which only shows profits), false narratives, information overload, and social media do the remaining damage.
While ending their careers in stock market investing, I have often seen people saying, "If I were well aware of the facts, I could have done well in the market". But in the meantime, they have burnt their hands so badly to hardly left with any cash and no hope.
Let us discuss those hidden truths of the market that no one will tell you.
- The more you trade, the more you lose: As you trade more, the higher the chances of profit, but there are even higher chances to go wrong. Overtrading is toxic and needs to be handled with utmost consciousness. People with clarity on their money-making targets, maintaining a journal, and keeping a record of their own trades can only maintain this discipline.
- अपुन ही भगवान है: It is the most dangerous thing in the world when a trader assumes he is the King/God of trading when he is on a winning streak. This ego kills the modesty and often leads to over-trading. Never have an ego in the market. Always remember you are a small fish in the market and know the boundaries of swimming. The shark (smart money) is always ready to eat small fish.
- Cash is the King: This term is always misunderstood as staying out of the market. It actually means respecting the liquidity, being opportunistic, and hitting the fire button at the right time. It is not necessary to participate daily/weekly and in each and every move. Being on cash actually protects you from false trades and pushes your purchasing power when there is blood in the market.
- Falling in love with the stocks: People often fall in love with the stocks that have given them profits in more than 3 instances. This is emotional trading and a one-sided love affair. The harsh fact of the market is that there is no place for emotions inthe market. Honestly, I made the same mistake in my early days in the market (somewhere in 2013). The lesson was very hard learnt and something I will always remember.
- Rome was not built in a day: In today's fast-moving world, the most costly asset is patience. It is hardly seen in traders and investors. But equity investing is not a Maggi 2-minute noodle recipe. If one wishes to earn multibagger returns, it takes years of conviction, confidence, perseverance, and even confidence in testing times. Investors who prioritize short-term gains over CAGR often end up earning very little, and the stock jumps after they exit. This is a common complaint investors have. The real truth behind this is that you were waiting for the stock to rally, and the stock was waiting for you to exit. Why? Just because good things take time. Once you have given the stock time to reward you, make sure you give enough time and cut the noise.
Most investors don’t quit because equity doesn’t work; they quit because no one prepared them for how it really works.
Equity doesn’t test your intelligence. It tests your expectations.
If you liked this blog and feel it is useful, share this with your friends, colleagues, and the ones who really need this.
Thank you.
Happy Investing !!