“A game of chance or a game of skill”
STOCK MARKET is the something today which is fantasizing the whole world in the today’s time but it is not always the same what you see through your naked eyes. Most of the people see stock market as a gold pot in which they will put there hand and will come out with the gold coins but in reality stock market is a two sword knife i.e. if it has the power to give you handsome returns then it also have the power to cut you into pieces within seconds.
With the stock market flooded with the IPO’s and these IPO’s giving the new lads some whooping returns everybody is of the mentality that stock market is EASY MONEY and everybody who enters this world makes profit but when the same individual gets the 440 volts shock from the stock market due to the global scenario or company related stuff then he starts cursing the markets saying STOCK MARKET IS A GAME OF CHANCE OR LUCK and there is no skill/knowledge involved on why prices are falling or rising .
Based on my first-hand experience and learnings as a short-term trader and an investor of the past few years I want to tell you that STOCK MARKET is something which is fully based on SKILLS and there is no way out of that luck. If you have the required skills and knowledge then this is the place that will make you rich ……..very rich in a considerate period of time and if you are purely playing in the markets based on luck then It also has the power to take you to the road with a bowl in your hand.
In the today’s world even a PANWALA is applying for an IPO and investing in the stock market so you can just imagine the reach of the stock market but the question arises DO HE REALLY HAVE THE REQUIRED SKILL/KNOWLEDGE OF THE SAME or HE IS JUST DOING SO ON THE WORDS OF SOME OTHER PERSON. For him it is a STOCK MARKET is a GAME of CHANCE as he is purely playing on his luck and he is losing money in it he will never turn back to stock market and will make a assumption about the markets that it is a BAD PLACE and one only loses money in stock market.
SOME UGLY TRUTHS ABOUT THE STOCK MARKET WHICH EVERY NEW ENTRANT SHOULD KEEP IN MIND BEFORE ENTERING THIS WORLD: –
- The ugliest truth is that OVER +90% of people lose money in the stock market . It is so because just like any other field stock market also requires certain skills and knowledge which most people lack and purely trade on the luck factor.
- Buying PENNY STOCKS with zero/low fundamentals and thinking that the stock will someday explode and will make them rich e.g., KINGFISHER AIRLINE after it debacle many people loaded there portfolio just with a hope for its revival later ended up losing their capital
- NO STOCK can GIVE US GUARANTEED RETURN. People have this mentality that if they have bought this stock it will only go up and will give them guaranteed return.
- The general public is of the perception that the stock market is an operator driven market and there are some people sitting on the top level manipulating it and axing down the small investors but the REAL TRUTH is that no operator is big enough that can drive a market . It is the fundamentals , demand /supply , Greed and fears of the market participants that runs the stock prices up and down.
- STOP LOSS are the life saviour for every trader and investor. One should always maintain stoploss for every trade as per their risk appetite. They save the person by cutting their finger otherwise they will end up chopping off their hand if they don’t maintain and respect the stop loss.
Based on the facts and figures stated above it is clear that the stock market is not an easy place to be in and there is nothing like easy money . Just like any other field, earning through the stock market as a livelihood is a full time job and requires a considerable amount of effort and skill set to earn money out of it. According to me it is the most difficult place to make money as your heart is always in your mouth with the stock prices moving up and down .
So my final call is that we should not think stock market as a game of chance rather we should develop/acquire the required skill set and discipline which the market demand from the participants to make money and at last what the market demands the most is the PATIENCE which every investor should have and maintain to pluck down the profits from the stock market
~ Abhishek Jain