Trading is an interesting business and a large number of people have a humongous attraction towards trading. In the trading world, there are many experts shouting from the top of their voice to trade for the long term if they want to make money. There are more number people engaged in short-term trading and percentage of people engaged in long-term is almost negligible.
To be successful in the market one has to be well equipped with facts and figures and follow the instinct based on knowledge. Patience is the key to making money in the stock market. According to Warren Buffet the giant of Wall Street, he made more money in waiting period than buying and selling stocks. However, to make big in the stock market there are some issues that need to be handled by the trader. These issues are-
- The natural instinct of human beings
As a human being, we have a natural instinct of being impatient. Since ancient days we have developed a theory of, killing today means eating today, else you will go hungry. This hunger for immediate results is the reason behind short-term trading and to curb this we need to develop some patience and satisfaction in what we are doing.
Media works on TRP and breaking news. They pay lip service for long-term trading but for their business they need to shout for short-term trading. It is all commerce and business, whatever will work for them, they will run. This means playing news that feeds the natural instinct of humans and this consumption brings TRP and ads. They focus on breaking news and try to feed our impulsive nature. This results in incapability of an average market man to think beyond the short term.
- Broking set up
Broking has become a full fleshed business. The broking firms are trying new and innovative ideas to attract clients and volume. The brokerage charges have already hit new low and the only method of gaining profit is by attracting new clients. This could only be done in short-term investments. The pressure of earning has not left the fund manager behind. They also prefer to offer short-term funds to their clients or the client will fly away. The difference in thoughts and actions in brokerage firm is similar to media house. They lip sync about long-term investment but feeds their clients about the opposite.
The irony of the situation is that all elements prefer long-term investment but are rigged against it. Now we can’t change the situation but as a trader, we need to find solutions to cope up with this situation.
There are experts and fund manager who have managed to create escape plan from this velocity and have been performing well with their long-term plans. Like them, traders also need to draw long-term plans.
Another important solution is to educate you about every situation with the help of a good mentor. What as trader needs are boarding with an investing coach regarding investment techniques. Actually more than a coach you need a mentor who can help you by making you understand and who can help you whenever you need.