The Emotional Challenge in Trading

I am very bad when it comes to making financial decisions. Like most other people I find it difficult to manage trading positions and my investments without becoming emotional attached and behaving irrationally. This is frustrating as I consider myself very knowledgeable about trading and investing.

So in theory I know I am a Expert who knows what he’s doing But, In practice when faced with a decision to buy or sell when things go wrong or right. Fear and greed comes in my mind, clouding my decision.Even after spending days researching a company or Index ( Nifty or Bank Nifty ) it’s still hard to click the trade button on my trading app. I have to stop myself buying or selling on recommendation of a TV Commentators, Market Pundits, YouTubers, random newspaper articles or an anonymous ger’s opinion. After all, like you, I’m only human.

The Solution: Systematic Trading and Investing:

Fortunately, there is a permanent solution. The answer is to partly or fully, systematise your trading. Decision making. Creating a trading system makes it easier to commit to a consistent strategy and removes the emotion.  There are many websites, YouTubers, gers, Market Pundits, Authors and offering trading systems. But many of these ‘trading systems’ require human interpretation, so they are not actually systematic. Some are even very dangerous, trading swiftly and expensively, and in excessive size.

They suggest you with a single ‘one size fits all’ trading system which won’t suit everybody.

Let me explain how to develop your own trading system, which suits your trading style and accomplish your financial goals, and which should not be costly to operate and dangerous.

Systematic Investing: A Profitable Alternative:

Systematic Trading is more profitable, and it requires less time and effort. 

This article is intended for everyone who wishes to systematize their Trading, either completely or partially. Many people will describe themselves as traders or investors, although there are no accepted definitions of either group. What I have to say is applicable to both kinds of readers, Traders and Investors,  so I use the terms trading and investing interchangeably; the use of one usually implies the other is included. This article will be useful to small traders – individual investors trading their own money 

Humans are better than computers at complex intellectual tasks. But, our emotions prevent us from fully utilizing this intelligence. The solution is to usesystems to make trading decisions

Why You Should Start System Trading Now ?

 Many professional traders have been using trading systems to trade in one form or another for decades, but they are still a small numbers. The investment world is changing and now is a better time than ever before to consider trading or investing with systems.

Now It’s also easier than ever for small traders to invest in a systematic way. Today, Technology has Revolutionised the financial industry. In the past small traders or investors had to rely on yesterday’s newspapers for stock prices and news. Now it’s possible to download real time and historical price data for free from numerous websites.

Challenges and Considerations in systematic trading

Many Brokers Traders are suggesting scalping or intraday trading, solely to encourage more buying and selling. You should never forget that your broker makes more money when you trade frequently,

While you lose out in brokerage and taxes unless the extra trades you make are sufficiently profitable

Getting Started with System Trading:

There are now many back-testing software packages and option backtesting websites  available. Which allow you to test potential strategies to see which made the most hypothetical money in the past. But, if you’re not careful this will often lead to losing actual money in the present

Finally, there are many You tubers, gers, books and websites containing trading systems, advice and guidance for trading in today’s world than any other time in history. So there is no shortage of tools and advice to begin trading and investing systematically, although you do need to be careful as they are lethal if not used safely.***