The most rewarding skill a trader can possess is the ability to deal with uncertain live market conditions and to be prepared for the unexpected surprises that may be thrown up to him.
When you are dealing with human life, the stakes are indeed high. Imagine the predicament of a doctor who has to rush an unknown patient with failing organs, into the OT; the sword of decision making hanging low over his head. The electrocardiogram may throw up images very similar to a volatile stock market chart of a trading terminal, and while a trader only risks money, the doctor has far more to lose.
The stock market carries the impression of uncertainty, ambiguity and risk, thereby making the overall trading environment unfit for the faint-hearted. The same environment, at times worse, is reflected in the medical practitioner’s profession. A surgeon while conducting an operation is required to be calm, composed and have the ability to take split second decisions, relying on his ability to be nimble and adroit. He needs to trust his instincts that are acquired through years of learning and practice. Cut to a stock market trader, and he needs to be similarly adept at his craft. He needs to possess the ability to take quick decisions in an uncertain market condition, to enable him to sail through trade related emergencies.
The Hippocratic Oath
Doctors take the Hippocratic Oath at the beginning of their careers to hold the highest ethical standards in beneficence, autonomy, and justice. A stock trader too should abide by these principles, while trading in the stock market. The high pressure should not make him give in to greed. It is important to prevent being influenced by external factors, like tips and hearsay, and maintain self-control while making rational and informed decisions.
The best doctors give the least medicine
A doctor is judged by the medicines he prescribes. If the diagnosis is right, logically, the medicines prescribed should be less, given that you are being treated for the actual ailment and not for probabilities. Similarly, if a stock trader has analyzed his charts correctly, he would know the right action to take. He doesn’t need to bother about the innumerable possibilities and attack them.
Care shouldn’t start in the Emergency room
A doctor always tries to control the illness right at the initial stage of symptoms , without waiting for the illness to intensify. A stock market trader too should build their trading skills, discover their trading style and build their portfolio, over a period of time and not try to implement new skills at the time of crises.
No shortcuts to success
A doctor spends a good number of years of his life, both before and after attaining the degree, learning about the human body, the various diseases and the medicines. Practice and learning go hand in hand for him and help him become better at his art, with time. Trading in the stock market similarly requires one to understand the nuances of the market and its many instruments, through focused learning and practice. A person who has jumped the bandwagon without enough knowledge, has finally burnt his fingers bad.
The most rewarding skill a trader can possess is the ability to deal with uncertain live market conditions and to be prepared for the unexpected surprises that may be thrown up to him, by setting stop losses and safeguarding his capital by mitigating risk, and by developing the right skills and a mindset to take the right decisions in a split second. No wonder then that there are innumerable success stories of doctors who took to trading in the stock market!
(By Hitesh Chotalia, Head of Education, Finlearn Academy)