WHEN TRADING IS 90% GAMBLING,THEN WHY DO MOST OF THE PEOPLE DO IT?
Who said trading is 90% gambling? It is 100% gambling. Both in trading and gambling, you need to bet/risk some money to make some money. No difference. People who lose in gambling would lose in trading as well because they don;t take any calculated risk.
A new trader who have 10k, risk this all 10k in a trade and lose all. And again come back with new capital, lose all again, the cycle repeats until one day, he decides stock market is a gambling place, no one makes money here and they leave. And they go and tell their family & friends as well that, trading is gambling, no one makes money here.
When you trade, the brain actually produces an opium-like substance called dopamine that rewards the brain's pleasure centers. Dopamine reinforces a kind of training process by your own brain. You get rewarded for certain activities, so you learn to do them passionately.
During this initial phase, trading gives you that adrenaline rush, people get attracted to it easily. Making their one month salary on one day in that one trade, makes you feel great. You want that feel again and again, so you end up over trading and losing most of your profits back to market.
So you end up doing revenge trading, you want to get back all you lost, but eventually you lose more. Trading is all about handling one’s own emotions. Only when you are able to control the greed and fear, trade with proper risk management, you can succeed here.
First and foremost, Trade with rules. Follow a proper trading systemLearn how much is too much, find out what is risk management/money managementlearn all about max drawdown, risk reward ratio, pay off ratio, continues losing streaks of a trading systemTrade only with the money you can afford to loseYour goal is to be good at the process, results will happen automatically. So dont focus on the profits, rather focus on the process.