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7 Truths About Stock Trading That You Need To Know

Stock trading is much more than what it looks – beyond what those videos and online articles articulate. Interestingly, this becomes more evident only to those who play the game firsthand, go through countless ups-downs themselves, and amass significant experience. So, it’s essential for every stock trader to be more open-minded and adaptive.

To help you start and move forward on the right track, here are 7 truths about stock trading that you need to know:

1. You will lose money

This is the ultimate truth that new stock traders often wish never to come. But it’s inevitable.

Some of the most successful stock traders have experienced massive losses; they continue to stumble across losses.

It’s a part of the journey.

Even when you have the perfect strategy, you can’t always outsmart the market.

So, when you win, keep your feet to the ground. When you lose, take it sportingly and get back up with the right lesson (and mindset).

2. You must proactively learn

Stock trading is a vast, vast subject. Every day brings its own lessons. The key to becoming a better stock trader is having a learner’s mindset.

You must be ready to learn something new daily. You must make proactive efforts to get better today than you were yesterday.

If you don’t learn, you won’t grow. And as a stock trader, if you’re not learning, you will eventually fail to build the desired portfolio.

So, do consume the right news every day; study the charts; enroll in an advanced online trading course. Spend your energy in learning about stock trading every day.

3. Emotional strength is just as important

Stock trading isn’t entirely about how much you know and how technically adept you are. It entails a lot of psychological and emotional pressure.

How do you handle the losses? How do you handle wins? How you manage your time? How you tackle market FUD? How you beat trading anxiety?

These require you to have more than just technical knowledge. You need to have emotional intelligence and strength.

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4. “Wait it out” is a strategy

Over-trading is a serious problem among the new traders especially.

Stock trading doesn’t mean you have to buy and sell stocks every day.

Waiting it out when you’re confused, can’t make of the existing trends, and don’t know what to do is a viable and preferred strategy.

This doesn’t show you’re not doing anything, as is often perceived by many. This simply means that you’re looking at the market, trying to understand it and finding a good entry point.

So, stock traders don’t always have to rush. Sometimes waiting is a great strategy.

5. The Warren Buffet rule

‘Be fearful when others are greedy and greedy when others are fearful,’ said Warren Buffet once. And it’s a great strategy.

When everyone is rushing to make a move, know that the market is likely overleveraged. When others are taking a step back, the market is likely underleveraged.

These trends provide a great opportunity for smart stock traders. Look out for such opportunities.

Is everyone panic selling their stocks? Maybe buy. Is everyone hastily buying stocks? Maybe exit.

6. Best trading indicators will help you only so much

As previously mentioned, stock trading isn’t all about technical dexterity.

There are many other dynamics that make or break a stock trader. Intuition that’s shaped out of the personal experience is among those factors.

So, even if you’re following the best trading indicators, you won’t necessarily make successful trades all the time. You will encounter losses.

Meaning to say, technical analysis will take you only so far. It’s a large part of the recipe indeed but there are other ingredients. And you will learn this as you become a more experienced stock trader.

7. You will have to make small sacrifices

This is true. And this is especially true if you’re a part-time stock trader.

To build a high-worth portfolio, you will have to make small sacrifices here and there.

At least in the early stages, you will have to give up on luxury activities. You might have to give up on a few family outings. You might have to crunch a bit of your sleep time.

Of course, you must keep health and happiness at the very center.

But successful stock traders do have to make small sacrifices in their own ways. You might have to do that too.


These are 7 truths about stock trading that you must know.

Some of these you’ll have to realize and work along with from the first day, others are something that you will truly understand over the course, as you gain more experience.

For instance, when starting, it’s not easy to wait it out, not follow the herd, and use intuitions to identify newer trends. These are what you will grow to have over the months and years. After all, you won’t be a good stock trader from the start no matter how qualified you are. You will get better by passing day and after every trade – provided, of course, you’re investing efforts and resources in getting better.

In the end, a successful (and profitable) stock trader isn’t the one that knows the most. They are the ones who understand the market the best.

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