Aladdin’s Magic Lamp
My first share investment gave me fairly good returns. So yes, I can say that I do have Beginner’s Luck. My second and third returns got even better each time.
I thought I had Aladdin's Magic Lamp, ready to castles in the air.
The bubble had burst for my fourth. In one stoke, I had lost all profit I had ever made. The next day the market tumbled, eroding almost half my investment.
Along with the share prices, all my castles also had hit the rock bottom. Lesson learnt: Money saved is money earned.
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In most endeavors, there is a direct correlation between efforts and results. The stock market does not quite work that way. You can do endless research, study charts, and know every nuance of the fundamentals but still have a negative result.
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Traders are ultimately trying to predict the future, and when someone tries to do that, then Luck will be a major factor in determining the outcome.
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Most traders underestimate the role of Luck in their trading process, and that is especially so when it is good luck. We are much more willing to attribute good results to skill and bad results to Luck. But, Luck is an equal opportunity employer, and it cuts both ways.
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The main problem when we have good luck is that it can lead to overconfidence and drive us to think that we can replicate a great outcome through sheer willpower. It is very easy to ignore the role of Luck in a trade when we have spent countless hours contemplating it and thinking about it.
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Overconfidence tends to produce bigger losses when the inevitable bad luck strikes again. We have been fooled into thinking we can always control the outcome when the reality is that Luck (good or bad) is always lurking.
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Money management is essentially Luck management. The idea is to find a methodology that limits the damage of bad luck while compounding the benefit of good luck.
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Luck : both good and bad - is your constant companion in trading. The more you embrace it and understand it, the better your chances of producing superior returns.
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In some way, Trading is like a chess game. A game of wits. You must think hard before you make a move. The stakes are money. In order to win or lose, you have to enter the market and risk money.
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It is better to realize that Luck is a double-edged sword. And, it is still better to rely on learned skills with only a quick nod of thanks to any Luck that might have been your ally.
I thought I had Aladdin's Magic Lamp, ready to castles in the air.
The bubble had burst for my fourth. In one stoke, I had lost all profit I had ever made. The next day the market tumbled, eroding almost half my investment.
Along with the share prices, all my castles also had hit the rock bottom. Lesson learnt: Money saved is money earned.
$Dow Jones Industrial Average(.DJI.US$ $Nasdaq Composite Index(.IXIC.US$ $Hang Seng Index(800000.HK$ $NYSE(NYSE.US$ $Fiverr International(FVRR.US$ $Thermo Fisher Scientific(TMO.US$ $Facebook(FB.US$ $Amazon(AMZN.US$ $Netflix(NFLX.US$ $Disney(DIS.US$ $Starbucks(SBUX.US$ $Coca-Cola(KO.US$ $American Express(AXP.US$ $Apple(AAPL.US$ $Merck & Co(MRK.US$ $Microsoft(MSFT.US$ $Tesla(TSLA.US$ $Goldman Sachs(GS.US$ $JPMorgan(JPM.US$
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HuatLady : Hope that Aladdin will once again favour you by creating more miracles in your Q4 investments. Good luck to the owner of this auspicious lamp.
HopeAlways : So magical!
HuatEver : I agree with you that a person tends to be overconfident and complacent if he is constantly lucky with his investments. That may be his downfall because he will not bother to think shrewdly in his next investment move.
GratefulPanda : So well said! I couldn't agree with every single word more
KT88 : Your sharing is superb and so on-point. Trading is indeed like a game of chess. A battle of WITS! I completely agree that luck is like a double edged sword. Well-said.
GentleMomma : Thank you for sharing this post. It was very well written and I appreciate your honesty, kind of felt like I could’ve written some parts of this myself based off of my own personal experiences with the market. Maybe we all experience many similar experiences within the world of trading, especially when we’re new to the whole scheme of things. Your posts that I just read through are INSPIRING and I appreciate them more than you’ll ever know. Thank you again.
ph2046 : Great article
SyueeOP HuatLady: Thank you. May Aladdin creates more miracles for us all! Good Luck to you!
SyueeOP HopeAlways: Thank you. May the magic work as a lucky charm that helps you achieve more success in your investments. Good Luck!
SyueeOP HuatEver: Agree, this is why we should always rely on our hard work, grit and learned skills for our investment journey. A little luck or magic will definitely be an extra boost too!
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