From a very early age, one of the key leanings for most of us is the fact that lying can be beneficial when you are faced with the ignominy of accepting a fault which you would hopefully avoid accepting. Generally one starts lying to others, then slowly it transcends to family and finally we start lying to oneself – all in a attempt to prove that we were right.
It is said that every New Year, there is a spike in admissions to Health Clubs / Gyms, but over time, the interest wanes off and people just stop going. Of course, ask anyone and he has a plethora of options which he says is stopping him from going to the Gym and that he is really serious and hence the sign up. But dig a bit deeper and most of the flags raised are just issues one came up to convince oneself that while I am ready, its factors beyond me that is stopping me from being able to do what is needed.
Lying always has a cost and its visible everywhere. One such place is the stock market. Trading is a risky business proposition with a high mortality ratio, yet that doesn’t stop people from trying to excel out here.
Most of us know the importance of Stops and how its important to exit when we are wrong, but how many times have we skipped getting out in the hope that this is just a temporary phenomenon and like the last time around, markets are just trying to take my position before it starts its journey back to where it started from.
Yes, some times, stocks do bounce back from where we go stopped out and make it seem that only if we had not got out, we would have been a lot better. But most of the time, a stop actually means that our view was wrong and markets were right.
After all, there is no operator who works day and night with the sole intention of stealing your small position. He will not move the market X% just because you have placed a stop that he wants to trigger. But, hey, the excuse of operator taking out your stop is a good one since it ensures that if markets did crack later on, you can always say that I would have kept the stop just that stops are seen and taken out by the bigger traders / investors.
We are lied all the time elsewhere too. When a Pseudo Analyst says that Nifty will reach 5,000, he is basing on fact that people really have a short term memory and if it does’t work out, no one will be the wiser, but if it works, if it woks, Oh, God – that can make him a Hero for having called the same correctly.
When the Vastu guys says all your problems are due to the fact that your door faces West instead of East, he is just providing you with the excuse that seemingly makes everything else seem right.
When we do’t accept our wrongs, we are just prolonging the pain that comes with it. As a famous Quote by Benjamin Franklin goes
“For the want of a nail the shoe was lost,
For the want of a shoe the horse was lost,
For the want of a horse the rider was lost,
For the want of a rider the battle was lost,
For the want of a battle the kingdom was lost,
And all for the want of a horseshoe-nail.”
Have seen a lot of folks losing fortunes in market just because they didn’t adhere to their stops the one time that would have made all the difference.
Stop lying to yourself that your problems are not because of your decisions but factors outside your control and that alone can make a hell lot of difference to the way you trade and invest.