InvestorQ : Is it true that as a trader, I should not focus on what could happen?
priya Shah made post

Is it true that as a trader, I should not focus on what could happen?

Priyanka N answered.
3 years ago

Nobody knows what is going to happen so it is presumptuous to believe that you would know as a trader. The focus of any trader has to be on three basic areas. Firstly, his task is to read the message that the market gives out about the underlying momentum of the markets. Secondly, the trader has to identify stocks to trade which are liquid and also ensure that he understands the right levels of entry and exit in these stocks. Lastly, the job of the trader is all about managing the risk within the constraints of capital and affordability.

If you notice, all these three requirements of a trader are all about the past. There is no focus on the future at all. How the stock price will move, whether the company will better analyst expectations, whether institutions will buy the stock; all that does not matter? What matters is what message the market is giving and what are the right entry and exit points for the stock. A trader has tot typically live in the present and base his trading decisions only on available data and chart trends. Traders do not overly obsess themselves with what is going to happen. Rather they focus more on interpreting what has happened. Your job is to make the best of the current situation and not try to predict the future. To start being a trader you must stop being an oracle.