Traders are like Albert Einstein!

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.

2 thoughts on “Traders are like Albert Einstein!

Add yours

  1. I am holding R System international since your recommendation… I see some promoters are selling stocks in open market and that concerns me… what is your opinion?

  2. Well said and summarized!!
    Actually it will be nice to do a study on the traders in bse or other exchanges over a year or two and have a evidence based result showing the case that you have outlined. Am sure these studies may exist somewhere…..
    thanks for the post!

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