Trading Psychology

Question 1Trading Psychology

Here's a post by a trader on the Trading QnA forum. What mistake (s) did the trader commit ? *

Select all that's applicable

“Hello Guys …
I m From Gujarat… I need your help.
I made huge mistake in 28 years
I m lost almost 30 Lakhs Rs. In F&O, Intraday & Margin Trading in 2.5 years
I don’t know what to do how they Recover !!
Almost all money are Borrowed from Friend & Relatives. They don’t even know About My Loss

My Image is very very good in Friends and Relatives
I want to Pay All Money to them in any condition.
I don’t want to break trust, Relationship & Friendship
But as you know the fact is 30 Lakhs is very huge amount, I don’t release even how can I lost such huge Amount in 2.5 years of period
Right Now I m too much depressed. I don’t know what can I do ? How I payback them all Money

I don’t care about my hard earned money loss but I only care about My friends & Family
Please guys help me in figure it out.
My life became just hell in this 2.5 years
If any one want to help me from any Amount, I am lifelong thankful to Him/Her and I m also give your money back in 3-4 years time period

Please Help me by a Good Advice and if possible than also By Money…

Only Revenge trading make me loss of 33 Lakhs otherwise It was only 5-6 Lakhs for Initially
I’ll share all details because it can be help for other people’s and they don’t made mistake same like me”

Trading with "Scared Capital" (i.e. capital that is not yours but borrowed from others)

Revenge Trading (i.e. not accepting losses and trying to prove the market wrong)

Not following a well defined Trading Plan

Answer 1

Correct

Great job!

The trader made all those mistakes.

Wrong

The trade made all the mistakes mentioned in options.

Question 2Trading Psychology

Read this post that a trader made on Trading QnA forum. What do you think about this question?*

Hi, I am a trader at zerodha. Now i am writing this email to express my huge concern and register a complaint. ….[I have] been doing demo trading since september 2016. I have also been learning about the stocks since then. I have done a lot of research and studies and as a result found 2 good equity trading strategies. I did demo trading with them and they both gave good results. But as soon as I used them in real market and they started giving me losses. As if someone was playing with my money. As if someone was controlling the stock prices. It was so annoying and disturbing. This is not fair. I am feeling cheated. For now, i have stopped trading . Please respond to this. What should i do?

Someone is clearly trying to harm this trader

This trader doesn't understand that paper trading results have little resemblances to real-world results because the emotions get involved in real world trading.

May be Zerodha is doing something wrong with his trades

May be he should consult an astrologist or pandit

Answer 2

Correct

Great job.

Yes, this trader didn’t understand that the results from paper trading have little resemblances to real-world results. What changes between paper trading and real life trading is the presence of emotions. In real life, a trader is going to be influenced by greed, fear, uncertainty and a number of other cognitive biases.

Wrong

This trader didn’t understand that the results from paper trading have little resemblances to real-world results. What changes between paper trading and real life trading is the presence of emotions. In real life, a trader is going to be influenced by greed, fear, uncertainty and a number of other cognitive biases.

Question 3Trading Psychology

You are having a bad trading day. You take a long trade but the stock falls down. You take a short trade but the stock runs up. What's happening?*

Pick 2 Choices

There is some cosmic conspiracy against you

Nothing unusual ; it happens to traders all the time. Just take a break and come back the next day.

All your concepts are wrong because they are not working today

Maybe you are not paying attention to other cues such as broader market sentiment, sector movement etc.

Answer 3

Correct

Great job.

The correct answers are:

Nothing unusual ; it happens to traders all the time. Just take a break and come back the next day.

Maybe you are not paying attention to other cues such as broader market sentiment, sector movement etc.

Wrong

It seems you are wrong.

The correct answers are:

Nothing unusual ; it happens to traders all the time. Just take a break and come back the next day.

Maybe you are not paying attention to other cues such as broader market sentiment, sector movement etc.

Question 4Trading Psychology

When you're in a trade, especially a losing trade, an ability to quickly make decision can be an asset.*

True

False

Answer 4

Correct

Great job.

The ability to quickly make decisions can be a great asset for any trader, especially in an intraday content. Traders who are prone to over-analyse a situation, typically end up postponing the decision and sometimes, end up with huge losses. When the losses are increasing, cut the losses first and analyze later.

Wrong

The ability to quickly make decisions can be a great asset for any trader, especially in an intraday content. Traders who are prone to over-analyse a situation, typically end up postponing the decision and sometimes, end up with huge losses. When the losses are increasing, cut the losses first and analyze later.

Question 5Trading Psychology

Trading for pleasure shows that you are passionate about trading and stock market in general.*

True

False

Answer 5

Correct

Great job.

Absolutely not. If you are deriving pleasure from trading, you are probably trading for the wrong reasons. Trading is a serious business where we have to incur profits and losses every day. Therefore, becoming indifferent to the outcome of the trade is paramount for long term success. All this passion and pleasure business is symptomatic of rookie traders who do not survive in the market for too long.

Wrong

It seems you are wrong.

The answer is “False”

If you are deriving pleasure from trading, you are probably trading for the wrong reasons. Trading is a serious business where we have to incur profits and losses every day. Therefore, becoming indifferent to the outcome of the trade is paramount for long term success. All this passion and pleasure business is symptomatic of rookie traders who do not survive in the market for too long.

Question 6Trading Psychology

Which of these two is avoidable: losses or mistake?*

Losses

Mistakes

Both

None

Answer 6

Correct

Great job.

You can avoid mistakes because they are in YOUR control. Losses are inevitable in the stock market; your job as a trader is to make sure that the losses as small as possible.

Wrong

It seems you are wrong.

The correct answer is “Mistakes”

You can avoid mistakes because they are in YOUR control. Losses are inevitable in the stock market; your job as a trader is to make sure that the losses as small as possible.

Question 7Trading Psychology

Professional traders frequently take one of these options that other retail traders hate doing. Which one is that?*

Big loss

Small loss

Big profit

Small profit

Answer 7

Correct

Great job.

The day you start appreciating small losses, is that the day you start trading like a professional trader

Wrong

It seems you are wrong.

The correct answer is Small loss.

The day you start appreciating small losses, is that the day you start trading like a professional trader.

Question 8Trading Psychology

Doubling down is the tendency to double the position size of the second trade after the first position end up in losses. It is a destructive mindset.*

True

False

Answer 8

Correct

Great job.

Wrong

It seems you are wrong.

The correct answer is “True“

Question 9Trading Psychology

New traders typically have the temptation to take the trade as soon as the market opens but that temptataion should be avoided because there is way too much volatility in the first 5-10 mins.*

True

False

Answer 9

Correct

Great job.

Wrong

It seems you are wrong.

The correct answer is True.

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Question 1Trading Psychology

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Question 2Trading Psychology

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Question 3Trading Psychology

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Question 4Trading Psychology

Answer 4

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Question 5Trading Psychology

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Question 6Trading Psychology

Answer 6

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Question 7Trading Psychology

Answer 7

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Question 8Trading Psychology

Answer 8

Correct

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Question 9Trading Psychology

Answer 9

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