Control mind to reap better benefits
The amount of profit does not depend on the stock selection, but it depends on the nature of the person. Psychology plays a key role as it decides whether you are a risk taker, or you want to averse risk
How much of profit you want to earn in the stock market depends not merely on the stock but also on your psychological nature.
Before getting into stock market you need to analyse whether you fit into the category of a trader or investor. A trader is happy even if he gets small amount of profits.
An investor has a long-term vision and even if a stock falls he does not panic because he knows that this is a correction in the market and in future it is most likely to fetch him high profits
If a person has invested in a stock and if the stock starts rising by about five to 10 per cent, fear and greed grips him and a trader would most likely exit with this nominal profit.
Contrary to this situation an investor would wait for a long time and he would prefer to book about 30 to 40 per cent by continuing to ride on the stock.
So, here the amount of profit does not depend on the stock selection, but it depends on the nature of the person.
Your psychological nature and the time period you choose decides whether you are a trader, short term trader or investor.
The psychology of the person determines the amount of the stop loss that he can take. Psychology plays a key role in the stock market as it decides whether you are a risk taker, or you want to averse risk.
One should trade in stock market according to his or her psychological nature. So, it is very important to identify your nature and then work in the stock market.
You need to train yourself to reap more profits. You should not be affected by a price fall, news related to stock markets etc.
Whenever markets fall you should not be gripped with fear and when there is a uprise you should not be overwhelmed with your profits.
How much of time is devoted to stock selection, technical chart analysis or fundamental analysis the same time is needed to identify one's psychological nature also.
Trade according to your nature. If you want to gain more profits but do not want to stay in the market for a long time, then you will not achieve your target until you change your behaviour.
More than stock market strategies or analysis, psychology plays a pivotal role in earning the amount of profits.
(The author is a homemaker who dabbles in stock market investments in free time)