We know how an “edge” is important to succeed in business in life. Extending this concept to markets, what ” market edge” do you have? Do you really know your competition? Do you know which sharks are there to take your money away?
First for short term traders-Do you know whom you are competing with? You are competing with quant focussed hedge funds who only hire PHDs in Nuclear Physics,Maths etc. And most of their trading is algorithmic and automated,which means by the time you decide to buy/sell,the computers might have already decided something which is going to go against you!They have got all the money, resources and talent to suck money out of the market.
To accompany these hedge fund folks are the investment banks which have all the insider information about companies in the world because of their existing relationship with these guys.
Do you really feel you are smart enough to beat these guys on short term trading? And you felt that making money on short term is so easy?
It makes me wonder how people spend countless days and hours working on building and maintaining edges in their profession, they never try to acquire an “edge” before they enter the market. If you feel you watch CNBC and NDTV profit, so you have an edge-so does your neighbour. Infact he doesn’t even understand English so he watches the ‘Hindi” version!
If you feel, you read 10 magazines that gives you the edge, so do others!Anything available in public domain usually doesn’t give you any “edge”.
Do you have a systematic “method” of investing ? Have you clearly defined that “method”?Have you clearly tested that method?Does that “edge” work in all market conditions?
Do you know your return target ? Do you understand risk?
If you have not thought of any of things above, then market is more like a “casino” to you.And you might fall in the category of “gambler” and all of us know how gamblers win big time only to lose bigger the next time!
The intention of asking these questions is not to scare you or anything but tell you that “Investing/Trading” business is not “that easy” as it “looks”! Much beyond the buy and sell equation.
So what can an individual investor do?
I always seek “expert” opinion on subjects I do not know about. Someone’s whose knowledge I can trust. Sometimes it is from friends and sometimes paid.It keeps me on the right track and saves me time.
So if you feel you are not an “expert”but want to grow your wealth, you take other’s help. If you real passion for this field and have the time and energy, you can start doing your own research.
As an individual investor you might require tools or support that can help you have an edge.
Despite all this,if you are fond of shooting in the dark, then keep on trying your “luck” in the markets. Keep on looking for “hot tips”!
But remember in markets,there are no free lunches. So whether we are investing 50,000 or 5 lakhs , the rules are the same.Markets punishes us badly if we have not done our homework well.
- SAGECAPITAL
First for short term traders-Do you know whom you are competing with? You are competing with quant focussed hedge funds who only hire PHDs in Nuclear Physics,Maths etc. And most of their trading is algorithmic and automated,which means by the time you decide to buy/sell,the computers might have already decided something which is going to go against you!They have got all the money, resources and talent to suck money out of the market.
To accompany these hedge fund folks are the investment banks which have all the insider information about companies in the world because of their existing relationship with these guys.
Do you really feel you are smart enough to beat these guys on short term trading? And you felt that making money on short term is so easy?
It makes me wonder how people spend countless days and hours working on building and maintaining edges in their profession, they never try to acquire an “edge” before they enter the market. If you feel you watch CNBC and NDTV profit, so you have an edge-so does your neighbour. Infact he doesn’t even understand English so he watches the ‘Hindi” version!
If you feel, you read 10 magazines that gives you the edge, so do others!Anything available in public domain usually doesn’t give you any “edge”.
Do you have a systematic “method” of investing ? Have you clearly defined that “method”?Have you clearly tested that method?Does that “edge” work in all market conditions?
Do you know your return target ? Do you understand risk?
If you have not thought of any of things above, then market is more like a “casino” to you.And you might fall in the category of “gambler” and all of us know how gamblers win big time only to lose bigger the next time!
The intention of asking these questions is not to scare you or anything but tell you that “Investing/Trading” business is not “that easy” as it “looks”! Much beyond the buy and sell equation.
So what can an individual investor do?
I always seek “expert” opinion on subjects I do not know about. Someone’s whose knowledge I can trust. Sometimes it is from friends and sometimes paid.It keeps me on the right track and saves me time.
So if you feel you are not an “expert”but want to grow your wealth, you take other’s help. If you real passion for this field and have the time and energy, you can start doing your own research.
As an individual investor you might require tools or support that can help you have an edge.
Despite all this,if you are fond of shooting in the dark, then keep on trying your “luck” in the markets. Keep on looking for “hot tips”!
But remember in markets,there are no free lunches. So whether we are investing 50,000 or 5 lakhs , the rules are the same.Markets punishes us badly if we have not done our homework well.
- SAGECAPITAL
