Harneet Singh - Trade Like a Monk: Trading Psychology is the Key to Successful Trading

Trade Like a Monk

Harneet Singh Kharbanda

DEDICATION

This book is dedicated to my Parents, my Wife and my lovely Daughter.

Disclaimer

This book should be treated only as educational material and the technical charts or stocks mentioned should not be treated as investment or trading advice. This book has been written to make the readers aware of the importance of trading psychology in the field of trading and investing. Please consult your financial advisor before entering into the realm of the stock market or before investing your hard earned money into the markets.

Table of Content

Chapter 1

Chapter 2

Chapter 3

Chapter 6

Part 2

Preface

I have been trading full-time in the stock markets for the last 5 years, and I am quite active on social media. I have interacted with thousands of traders and investors via social media platforms and directly while attending offline trading and investing conferences across India. While interacting with a trader or investor, whether they are seasoned players of the markets or just starting their journey into the exciting realm of stock markets, one thing I found in common was that everyone focused too much on the technical and strategy aspects of trading and almost everyone ignored the psychology part.

If you interact with any pro trader or investor, they would tell you how much trading psychology helped them be better traders or investors. In fact, I believe that trading psychology and mindset is 80% of the equation to being a better trader or investor because if everyone could become a better trader just by being good at technical or fundamental analysis, all the CMTs ( Chartered Market Technicians )and CFAs ( Chartered Financial Analysts ) of the world would have been the ones dominating the markets. Whereas we have seen that the great investors and traders are people who have humble educational backgrounds, but have mastered their trading and investing by conquering their mind. Its You vs. You over here, rather than You vs. the Markets.

Acknowledgments

I am grateful to all the mentors who have helped me directly or indirectly to become a better trader.

I will always be grateful to one person, without whom even this book would not have been possible Indrazith Shantharaj.

I met him in Bengaluru a few years back. Even though he didnt know me personally and we had just interacted a few times over Twitter messages till then, he met me and sat with me for 2 days and explained each and everything about book writing and has helped me day in and day out to prepare this book.

When he published his first book a few years back, he faced many problems. So he wanted to make sure that I dont go through all those hardships, and he literally paved the path so smoothly that I could write this book with ease. He even introduced me to the editor of this book Tony Gomez. So I really cannot thank you enough brother.

I want to thank all the amazing traders whom I have interviewed for this book. As usual, we might have seen that many traders try to hide their trading style and like to keep it to themselves. So I was worried whether I could convince them to be a part of this book. But to my surprise, all the traders whom I asked, agreed right away!

Quote #1

The Millions that I lost in the Stock Market, Taught me lessons worth Billions!

Chapter 1.

The Flickering Lights!

These are some of the questions that every new trader has in his mind, and they just want to enter the realm of the stock market; full of excitement and make it to the top. While passion and excitement are the fuel to fulfill any desire, we should proceed only after planning fully and doing groundwork, before jumping into the ocean of the stock market.

The most common mistake that people make is that they enter into the market half-prepared or lets face it, not prepared at all. They are just fascinated by the huge success stories of some of the legendary traders and investors, and they start seeing themselves in their shoes. However, in any other occupation or profession, we need to complete a certain amount of formal studies followed by higher studies and finally some internship or practice sessions before finally landing into a profession that makes us money.

It is one of the most critical factors why we start wrong in the first place, and once we get a taste of the quick money, we get hooked. After that, there is no looking back, and we often keep trading without any plan till we realize our mistake too late.

Let me start by telling you an exciting story. There was a young boy, very enthusiastic about markets. Lets call him Rahul. Rahuls family was involved in the cloth business, and after completing his studies, he had to join his family business as that sounded like the sanest plan at that time. After doing this business for a few years, although he was making good money, his heart was not really into it.

He had heard about the stock market from his friends when he was in college but didnt take it seriously as he had heard many devastating stories of some of his fathers friends and relatives who had lost an enormous amount in the markets.

He didnt think about the stock market after that till he met a guy who was making a living out of full-time trading. He got very excited and wanted to learn about trading. The trader told him that as many people make losses, it is evident that a few people take away all the money in the form of profits. So there has to be an equilibrium in the markets in the short term.

He was so eager to learn about trading that he requested the trader to teach him everything about the markets. The trader accepted his request and called him to his house the following day. When he went there, he noticed that even though the trader had a multi-screen setup, he was not glued to the screens and was just glancing at the rates once in a while. He looked at ease and was not worried by the red and green lights constantly flickering in front of him. For Rahul, the office and setup were love at first sight.