From 37 Lakhs to 1 Lakh: Lessons from mistakes of fellow trader

The stock market can be a thrilling but challenging place, especially for new traders. Recently, I had a conversation with a fellow trader who went through a rough patch and sought help to recover from his losses. Let's delve into his experience and extract essential lessons for aspiring traders to navigate the stock market wisely.

The Trader's Story
Yesterday, I received a message from a trader who felt really down because he lost a lot of money in the stock market. He had started with a good amount, but unfortunately, he ended up losing a massive 37 lakh Indian rupees, leaving him with just 1 lakh rupees now. He was feeling desperate to find a quick solution to recover his losses and offered to pay me for my trading advice.

Understanding his situation, I reached out to him to learn more about what led to such significant losses. He shared that he made a few common mistakes, like blindly following trading calls from others like Telegram groups and paid call services and handing over control of his trading account to someone else like account managing/ handling services, hoping they could help him make better decisions. Unfortunately, these choices only worsened his situation and left him feeling stuck.

Seeking Quick Solutions
In his desperation, the trader was searching for quick solutions to recover his losses. He hoped that by following my trading calls, he could turn things around and make up for the losses he suffered. However, I knew that seeking quick fixes rarely works in the stock market. It's essential to understand that success takes time, and there are no shortcuts to making a quick fortune.

Setting Realistic Goals
One of the major problems the trader is facing is setting unrealistic goals. He wanted to turn his 1 lakh rupees into 37 lakh rupees rapidly, which is a very impractical approach. In the stock market, it's crucial to set achievable goals and have patience. Building wealth takes time and consistent effort, not overnight miracles.

Avoid Blindly Following Others
A significant mistake the trader made was blindly following others' advice without fully understanding the reasons behind it. He didn't do his own research and simply followed what others suggested. This can be dangerous because not all advice is reliable or suitable for your specific situation. It's crucial to learn about the market and make informed decisions based on your knowledge.

Chasing Tips and Rumours
The trader's reliance on trading calls from random sources exposed him to unreliable advice and rumours. It's essential to avoid chasing hot tips or acting on rumours without verification. Successful trading is based on well-researched decisions and a deep understanding of the assets you're investing in.

Trading Without a Plan
Another significant mistake was trading without a well-defined plan. The trader didn't have clear entry and exit strategies, which led to impulsive decisions. Having a trading plan that outlines your goals, risk tolerance, and trading strategies is crucial for maintaining consistency and discipline in your trading approach.

Stay in Control of Your Account
Handing over control of his trading account was another big mistake the trader made. When you let someone else trade on your behalf, you lose control over your money and decisions. It's essential to stay in charge of your account and take full responsibility for your trades.

Trading with Emotions
The trader's emotional trading behaviour was a major stumbling block. Emotions like fear, greed, and impatience can cloud judgment and lead to irrational decisions. Keeping emotions in check and following your trading plan objectively is key to making informed choices.

Overtrading
The trader's eagerness to recover losses quickly made him overtrade and take unnecessary risks. Overtrading can lead to increased transaction costs and potential losses due to impulsive decision-making. Patience is vital in trading, waiting for the right opportunities instead of rushing into trades.

Lack of Education and Continuous Learning
The trader's lack of proper education and continuous learning was evident in his approach. Successful traders never stop learning and improving their skills. Keeping yourself updated on market trends, economic developments, and trading strategies is essential to adapt to dynamic market conditions.

Learning and Practice are Key
The trader lacked proper knowledge and practice. I stressed the importance of learning about the stock market and practicing with small amounts before risking significant money. Trading is a skill that requires practice to improve.

Ignoring Market Trends and Analysis
The trader failed to pay attention to market trends and analysis. Successful trading involves studying charts, technical indicators, and fundamental factors that impact the market. Ignoring these critical aspects can result in making uninformed decisions and being ill-prepared for market shifts.

Final Conclusion
The trader's journey through significant losses in the stock market provides us with valuable lessons to improve our trading approach. Avoiding quick fixes, setting realistic goals, conducting thorough research, and staying in control of your account are vital for success. Implementing risk management strategies, trading with discipline, and avoiding emotional decisions are essential for consistent profitability. Remember, trading is a journey of continuous learning, and embracing a growth mindset will help you become a successful trader in the long run. Happy trading and may your journey be filled with profitable experiences Remember, the stock market is a journey, and it's okay to make mistakes as long as you learn from them and keep improving.