Futurecaps

The core purpose of stock market is to meet companies with investors where:

• Companies can raise money
• Investors can earn from appreciation, dividends

Stock exchanges found another game over it known as:

• Trading

This is just working over the price-movements.  Good for exchange and government as they:

• Extract brokerage
• Margin fee
• Service taxes
• Capital gain taxes

Unfortunately, 99% traders took in the wrong way of multiplying wealth.  They expect 100 to 1000% returns in a trade leveraging high & with no money management skills.

Albert Einstein

These traders feel themselves like Albert Einstein as the trader-world immerse them with lot of ideas:

• Moving Averages
• Exponential Moving Averages
• Candle Sticks
• Relative Strength Index

They explore it with great passion & their passion would have turned destructive, once they realize that:

• 99% Traders won’t make wealth in trading
• Trading is one of the brain-storming job where the investor works hard to destruct wealth
• Technical signal works wrong with External news
• To make 1 rupee in 1 hour they have to be smarter than the 99% rest
• Trading is not passive job. It requires time, energy & infrastructure.  If one takes a whole year of trading profit, they could have made double the money by going for a regular job. 🙂
• The tips providers sell tips for living, instead of trading-compounding 1000% every month and becoming rich person in the world
• Big money wins requires big money losers on the other end

Trading is not the core purpose of market. It is the manifestation to squeeze money from amateur-investors who do not wanted to take the hard ship of analyzing company, holding long term to multiply money.

A Note

We have seen successful traders though.  They use big money, active time, sophisticated software & solid money management skills.  But, they are not becoming super-rich like Warren Buffet. They trade for living.  If we see their yearly-guaranteed returns, it is much less than the fundamental way of investing comparing the active-dull-6-hour-trading they have to perform.

This entry was posted on September 15, 2014 at 7:13 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.