5 simple rules for gaining huge profits in stock market

If you cant control your emotions, please don't get in the stock market. It is an extreme mind game. We are all evolutionary trained to run away from a tiger in the jungle and to run towards an oasis in the desert. Majority of the traders 95% of them loses their money in stock market chasing money. They do the same they are trained for in prehistoric period. But, the stock market is an just a mix of huge investments controlling market in the short term and controlling peoples minds using this genetic wiring that we are born with. We run towards the stock that is high, and run away from the stock that is low. As the result of it, lose all of our money. I would like to share my journey into how I overcome these problems.

 

 Reduce or Avoid Noise

 Stop listening to what they tell in the news, predictions, talks about the daily changes in the stock market and the views of the stock analysis over very short term. Whatever they tell in the news, it gives mixed results in the stock market. It is just sheer amount of noise that 95% of the traders listen and guess what, they lose all their money. The people who make real money get into the trade when there is no news and exit the trade when they hear the news. If you enter the trade after watching news, guess what effect you can reap if it has already been snatched away and the timing is wrong for you.

Try Expanding your mind first, not pockets 

Many dive directly into stock market, wishing to make huge amounts of money and to become rich within few months or years. I am sorry to say, but things doesn't work that way. First focus on gaining knowledge about the market. This thing that made a huge impact on my financial decisions was after watching this series of talks at google about investing (there are around 41 videos, each video takes about 1hour or more to see). Learn from others mistakes and soak in all the wisdom that you can saturate your heart and mind with others experiences and intelligence. You can also read the books that is suggested in the talks. You will be years ahead in the game if you do this. Then, get into the trading part. You will not regret the knowledge you have acquired.

Play by your rules, not others 

As Warren Buffet says, there is no financial advantage when you do what the crowd do. You have to create your own rules, playbook or tricks whatever you wish to call it and it changes too, you have to update your rules if things doesn't work. The things and strategy i used a year back doesn't work now, markets are dynamic, you must also be the same. The majority of the outliers in the market tell you to buy low and sell high. It is not that simple. You have to rewire your emotional nature and have various quantification that will analytically give you the gist of what you can expect. It can change the probability of success. Do paper trading, without involving money. Develop your strategy , entry , hold, exit conditions. Don't ever get locked into the pattern trading, it is the worst kind of trading. Don't try to fit the market into your way. Market doesn't move your way. Gradually build your clear strategy. Reduce the losses, try to fix a percentage of loss, sell it if it hits this value or lower immediately. Its better to lose less  then to hold on and lose more. And be glad that you followed your fixed rules.

See the Game behind the Game

Watch the market in action and get the game behind the game. It takes a while to get a hold of this. Like for example, when there is high price fluctuation or sharply lowered and then after a while the stock takes of. It is just that the huge investing firms are working to shake off all the retailers and to grab their profits. The lowering is more sharp then the raising because the retailers sell immediately when prices fall, it is much more painful to hold the stock. They get into the trade when the stock is getting higher, which in turn is a game played by BIG PLAYERS to lead the crowd toward the cliff just to push them. Try to see the game behind the game, what is really happening to the average people vs the TOP FIRMS that grabs day in and day out from the retailers. The money lost by the 95% of the traders goes to the 5% of the traders. By intuitively understanding what is going on in the background, you will enter into the 5% of the traders.

Take a Sniper shot, Don't crap-shoot

 If you can make one intelligent trade once a month it would make your rich. if you make 100 trades out of overconfidence, emotionally biased or regrets then you would lose everything. It is just that you need to be very qualitative and less quantitative of your trades. You don't need to crap-shoot at all the trades that you can do. Wait for the correct moment(hiding), set your trade framework/tools( sniper ) that lets you pick that rare moments/stocks combinations(target). If you get a stock that matches your criteria. Take a breath and take a sniper shot (buy/sell) and make huge profits.

I hope this helps you in doing better trading and investment. If you have any queries or comments, please do post it below in the comment section.