Muhurat trading is the auspicious stock trading practice for an hour on Diwali (Deepawali) is done traditionally to celebrate New Year. It is a symbolic ritual which has been performed for years. As Diwali also marks the beginning of the New Year, it is believed that muhurat trading on this day brings in wealth and prosperity throughout the year.
Vows traders should make on Mahurat Trading session to follow for next full year.
Perfectionism: There is no perfection in trading as far as making money on every trade or having a perfect system. All you can hope to be perfect at, is following your system, rules, and trading plan. A winning trade should be measured as one in which you followed all your preset guidelines. Even the best traders only average about a 50%-60% win rate at best over long periods of time. The key is having bigger winners than losers, not being perfect. Like in baseball where a .300 hitter can get into the hall of fame. A .500 trader in the market can become wealthy if his wins outpace his losses.
Fear: Faith in your system is the only way to overcome your fear of trading. You must complete enoughback testing on your system until you know that you have a valid edge over the market in the long term. You must see opportunity in trading not possible losses. You must take your systems trade signals each time and if you can’t overcome your fear of loss and failure then perhaps trading is not the best profession for you.
Pride: We are not our trading account and staring at our profit and loss too much is a major detriment in one’s trading. Traders must cut losses at their predetermined stop, not pridefully hang on trying to prove they are right. We must separate ourselves from the trading. A person’s value is not tied to a trade or performance record. If we followed our system then we can’t view that as a personal loss. Our system failed us.
Impatience: Wait, take your entry signal when it is time and not a tick before your system triggers the trade. It’s important let our profits run their course and not prematurely take them until the trend has run it’s course. We need to give our trades room to breathe and not cut our loss until the system confirms it is time.
Greed: Traders should not chase a trade when it is to late. We must take our profits off the table when it is time and we should never allow a winner to turn into a loser. If this happens you have nobody else to blame but your greed greed. Over trading and trying to make more money when our system does not say it is time is born of greed and usually ends with a negative p&l statement.
Anger: Do not get mad at yourself. Learn from your mistakes and move on. Every mistake gets you closer to learning what you need to do to become consistently profitable. Do not get mad at the “market” it is a voting machine and not an entity. Accept your losses and begin again.
Recklessness: Trading to big of a position size is risky, reckless, and completely unnecessary. Only enter appropriate sized trades with preplanned stop losses and then trailing stops to lock in profits while they are there. Follow your system and rules and if find yourself hoping and wishing the stock would stop moving against you instead of making decisions based on facts, you should exit that trade immediately.
We need to first realize what trading “sins” we are guilty of, then we can decide to repent and no longer commit them.