We’re all kids on some level.
Do you remember when video game parlours hit your town?
We used to pretty much storm them, and blow up a lot of pocket money.
Do you remember the Gulf War (1991), and how it was portrayed on television like a video game?
Our life is about button-clicks.
If we don’t click a button for a day, we have an urge to click buttons. We get withdrawal symptoms.
Cut to the markets.
The marketplace today is at your fingertips. You can contol your interaction with a few button-clicks.
What’s the inherent danger?
More and more clicks, of course.
Your circumstances allow you to get as much action as you please. Play the markets to your heart’s content.
Is that good?
What this does is satisfy your craving for action.
It also generates fat brokerage for your broker.
Volume does not necessarily translate into profits. So, it’s not a given that you’ve made more money by trading more.
The inherent danger is that your A-game is threatened by the extra action.
Never let anything threaten your A-game.
For example, if your A-game is investing, the extra trading action might confuse you, and you might start treating your investment portfolio like a trading portfolio.
Over a few months, your investment portfolio will then actually start looking like a trading portfolio. Does that solve your purpose?
You’ve ruined your A-game.
Nobody’s asking you not to get your daily shot of button-clicks. It’s a free world. Go, get your daily dose. Fine.
However, anyone with common-sense will ask you to keep your A-game intact. Your reckless button-clicking, thus, needs to be channelized, and should not blow over to ruin your A-game.
Welcome to the world of options, as in the trading instruments called “options”. Fire away, satisfy your video game urge. There are cheap options, and there are expensive options. Move amongst the cheaper ones. Satisfy your video game urge. It doesn’t matter if you lose money. The sums in question will be small. At least you’ve gotten all your impulsiveness out of the way. Now, when you approach your long-term investment portfolio, you are not brash, but focused.
What happens when trading is your A-game, and not investing?
Ever heard of overtrading?
Can drain you. Life might become moody. Kids and family would then bear the brunt of your trading hangover.
Worth it? Naehhhh.
So what do you do?
If trading’s your A-game, satisfy your video-game urge on an actual playstation or something. Use your imagination. Play the keyboard. Write. Whatever it takes for you not to …
… overtrade. Do not overtrade at any cost. Save ample energy and your good mood phase for your family.
What’s the thin line between normal trading and overtrading? How do you notice that you are overtrading?
Energy reserves. You know it when energy you’ve reserved for something else is seeping into your trading. That’s when you are overtrading.
You see, so much in this field is not mathematical or formula-based, but feeling- and art-based. Discovering the thin line between normal trading and overtrading is an art.
Frankly, even stock-picking is an art. You can go on about numbers, and trendlines and blah, blah, blah, but fact remains that ultimately and in the end, picking a multibagger is more of a gut-feel thing.
While trading, you’re looking for spikes. When and where is the next spike going to happen? Ultimately and in the end, that’s also a gut-feel thing.
In the marketplace, apart from needing to be technically savvy, or needing to be a number-cruncher, one needs to be an artist too. Yeah, the artist’s touch binds the game together, and makes it enjoyable to play.