There are a lot of people who trade to have fun. Since life is very boring in their jobs or business the only thing that can give them some excitement is trading.
Read this email from one of my clients:
I am surprised that a strategy he paid for to learn and looks good him does not get his attention to trade because it takes 15 days to make money. Strange that people who do jobs get paid once a month. A trade that pays twice a month feels boring to him. Seems like people do not use the best gift by God to humans – their Brains. 🙂
How You Start Trading For Fun. This is how it happens:
1. You are approached by a stock broker to open an account with them. All they promise is amazing low brokerages and great tips. So you start dreaming a great and rich life and open an account with them. (Note: If you are paying money per lot for trading then please know that you are paying too much to your broker. Let me know your name, email and mobile number. I can help you save money trading. Contact me here.)
2. Once done you transfer cash in your demat or trading account to start trading. I think in India average amount transferred for the first time now is Rs. 50,000 to 1 lakh. A few years back it must be within 10,000 to 30,000.
3. The broker sees you have shifted funds. Now his time starts to make money. Note that your broker cannot make money from you if you do not trade. 100% brokerage goes to his bank account.
4. He gives you a call and advises you to buy xxx stock and guarantees that this stock might give 20-30% returns in 3-4 months. You say yes. He keeps the phone down before you can ask any question. He then buys the stock in your account.
5. You have fun watching the stock movement during office hours. After all you also opened the account and traded to have some entertainment during boring office hours.
6. After four months you see that the stock is still at same rate or down 20-30% instead of up. You then call your broker and he gives you some excuse like this happened or that happened which no one had an idea else the stock would have performed well. You think he is right.
7. He knows that if you trade again he will make money again. So he now advises you to exit from this stock and get into another stock which is looking promising.
8. You start dreaming again. In any case you were bored of seeing the same stock movement for months and you wanted a change to have some fun. So you say yes again. Broker keeps the phone down.
9. Within seconds he exits from that stock and buys the one he advised. Remember that these people never hit “Limit Orders” to get the best rates. They hit “Market Order” to save time and make sure that the trade gets executed. If you don’t know “Market Orders” gets executed at the worst rate going at that time. You buy the stock from the highest bid seller, and you sell the stock to the lowest bid buyer. Broker does not care.
10. An Advise: Do not let your broker trade. You must have a demat trading account where you can trade online. So you must trade your money yourself. If its not allowed to trade in office then trade from your mobile or during lunch go to the nearest Cyber cafe login and trade. All it will take is 5 minutes. Try to get the best rates by hitting “Limit Orders”.
11. Do not trade to have fun during office hours. Trade to make money and be happy even if you make 15% return a year. If you have friends in USA ask them the Fixed Deposit rates there. Its almost 1-2% a year. Why? Because inflation there is ZERO. In India inflation is around 7%. So if you are making 15% you are making 8% more than inflation. So your real return is 8% a year. Isn’t it much better than losing money trading but having fun? I think it’s much better to make money feeling bored, working hard and using our knowledge, rather than buying fun in stock markets.
So basically you must:
a) Get knowledge as much as possible on trading whatever you want to trade in stock markets.
b) Manage your own funds.
c) Trade yourself.
d) Know the risk you are taking and invest the amount of money in that trade which is reasonable. For example if the risk is very high, reduced the money involved in that trade. If the risk is low, increase the amount.
e) Do not listen to tips from your brokers as all they want is that you trade. They are least bothered whether you make money or not. All they want is that you trade so that they can make some money.
If you are a broker and reading this I am sorry but this article is saying what I have experienced from my first five brokers till now. I am sure many others too experience the same. Most of my initial trades were done because my brokers advised me. Not a single advise by them made money for me.
1. Open trading or demat account to accumulate wealth over long time not to have fun during office hours.
2. Do not trade to have fun but trade to make money. Stick to trades that are making money for you even if that are boring.
3. Even if boring trades make money stick to it. With the profits go and buy some fun like watching movies or sports in a stadium.
4. Remember that even actors who sell us entertainment work hard and take their work very seriously to make a movie. When we pay for the movie tickets they get a part of it and they end up making crores. Then to celebrate success they organize a party and have fun. This comes in media and we get jealous seeing them enjoying life. What media does not show is when they work hard while making that entertainment for us. So why should we be jealous of successful people when they work harder than us?
Most of them are bored from their work, but they know if they start working on easy movies their market value will depreciate and they will be paid less. So they keep working for hours in great banners every day. We do not get to see that. Sportsmen or actors – those who keep working hard everyday keep rising the ladder of success and keep making more money year after year. Those who don’t are out from the money market. Their popularity and market value goes down. Why do you think some players and actors are paid more than others.
Learn from them.
4. Write down your goals in life and work to achieve it everyday. I bet that if you are honest and working hard, God will give you that goal before time.
5. Never be jealous of anyone in life just because they are happy and rich, because you do not know how much work they have done to achieve success. Ask them. They will give you free lessons to work hard to achieve goals. You will then actually thank them and appreciate them.
6. I admire successful people because I know they are different from others and are hard workers. If you are also successful in life due to hard work please share your story in the comments section or send me an email.
Thank You For Reading. Hope this article will motivate you to work hard even if its boring.
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Dilip Shaw, Founder
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