- more than a working knowledge of technical analysis
- a trading strategy that has been honed over several years
But isn't technical analysis what this blog is all about? Yes. However, learning about technical analysis may be necessary, but it is not sufficient.
A trading strategy for picking entry points, exit points, setting stop-losses, identifying chart patterns while they are still forming and having the discipline to stick to the strategy takes many years of experience.
Lack of appreciation of the skills and discipline required for trading success is why majority of day traders lose money.
That is like warning someone that smoking and drinking are injurious to health. People do it anyway because their peers are doing it, and they don't want to miss out on all the fun.
It is the fun and excitement of making money with very little capital outlay and even less effort that draws beginners to day trading like moths to a flame.
There are two choices in front of beginners:
- tread the path of slow and steady - gradually build up your capital by investing your monthly savings in one or two mutual funds; once you have around Rs 5 Lakhs in your funds, think about building a portfolio of individual stocks; then keep adding to your portfolio from your monthly savings, and retire rich
- jump into the stock market after opening a demat account and a trading account; pay some margin money and start day trading