Overcoming fear, greed key to become a successful trader

It certainly is a completely new way of looking at the stock market or stock trading. He thinks that mastering the psychological aspect of trading helps one regulate one's emotions, maintain discipline, overcome biases, build confidence, and develop resilience. By incorporating these psychological skills into one's trading approach, one can increase one's chances of making successful trades and achieving consistent profitability in the long run.

Speaking to Bizz Buzz exclusively, Shrey Jain, Founder and CEO, SAS Online, one of India's leading Deep Discount Brokerage company (Mind you that a deep discount broker or brokerage firm is an agent who mediates trades on exchanges between securities buyers and sellers at even lower commission rates than those offered by a traditional discount broker), with more than 55,000 clients, over one lakh crore daily turnover, and three lakh executed orders daily, explains how mastering psychology can help traders in making successful trade

Why do you think and always advocate that psychology and good psychological practices and skills are important for stock trading? To put it in another language, how mastering the psychological aspect of trading helps one in stock trading?

Stock trading is a complex and dynamic field that involves more than just analyzing charts and numbers; it requires mastering the psychology behind decision-making. Traders commonly experience a diverse range of emotions such as fear, greed, regret, hope, overconfidence, doubt, and nervousness throughout their trading journey. Not letting your emotions affect your trading decisions is the real meaning of trading psychology! Mastering these psychological aspects of trading can greatly contribute to making successful trades.

Can you give some examples of how strong psychology or good psychological practice and skills help in stock trading activities?

Fear and greed are two powerful emotions that can drive traders to make irrational decisions. Fear can cause traders to panic sell during market downturns, missing out on potential gains. On the other hand, greed can lead traders to hold onto positions for too long, hoping for excessive profits. Successful traders acknowledge these emotions. This is the time to take a step back and analyze the situation objectively of your trading plan and the reasons behind his initial investment decisions.

Be it stock market or elsewhere, in life we often live with hope, confidence and at times 'over-confidence'.......

Especially, in stick trading, we need to control hope and overconfidence. Hope can arise when traders hold onto losing positions, hoping for a reversal. Overconfidence can lead to excessive risk-taking without proper analysis. Both emotions can hinder trading success. Successful traders maintain a realistic outlook, base their decisions on thorough analysis, and avoid being driven solely by hope or overconfidence.

Discipline and consistency are equally important. Aren't they?

Yes, successful trading requires discipline and consistency. It allows you to resist the temptation of deviating from your plan based on emotional impulses, leading to more consistent and profitable trades. A disciplined trader knows when to enter and exit trades, and is not swayed by short-term market fluctuations.

One often gets biased, which also has huge impacts on the decisions that an investor takes….

You are right. One needs to overcome biases while doing stock trading. Psychological biases can significantly impact trading decisions. This enables you to make more objective assessments of market conditions and make informed trading decisions.

Could you point out other ways how psychological factors impact stock trading?

Confidence is another psychological aspect which is very crucial in stock trading. Building confidence requires a combination of knowledge, experience, and self-belief. In the face of a draw down, confidence can waver, leading to hesitation or self-doubt. By maintaining confidence, one is more likely to make decisive and well-reasoned trading decisions, contributing to his overall profitability. Then come the attributes like 'resilience and adaptability'.

Stock trading is inherently unpredictable, and setbacks are inevitable. Maintaining a resilient mindset is essential to bounce back from losses and stay focused during challenging times. Resilient traders view setbacks as learning opportunities and understand that losses are part of the trading journey. They adapt to changing market conditions, analyze their mistakes, and make necessary adjustments to their strategies.

Talking about your own company and the experience you offer to the customers, how do you ensure a satisfactory and never-before customer experience in SAS Online?

We have grown organically to more than 55,000 traders all via referrals. Having said that, I believe, providing outstanding customer experience in trading can make a significant difference in the success of a trading business. For that, we are always focusing on key factors like user-friendly trading platform, transparent pricing and fees, educational resources like webinars, accessible customer support that sets us apart from competitors and fosters long-term customer loyalty.

Therefore, what advice would you like to give to someone, who is absolutely new to the stock market?

I would like to suggest that they should determine their goals, develop risk tolerance, maintain investment time-frame and start with a small amount of money without risking too much of their savings. They should always stay disciplined and avoid emotional responses to market movements. Remember that investing in the stock market involves risk, and there are no guarantees of returns. However, with proper education, planning, and discipline, investing in the stock market can be a rewarding way to build wealth over the long term.

So, basically, you are out on a mission?

I am out on a mission to change how people look at trading as a profession. My belief system is simple - trading must be profitable and sustainable.