Master Your Trade: 3 Key Insights From Sarthak Shah To Conquer Your Trades

April 26, 2024
min read
Do you ever feel like you’re constantly second-guessing your trades? Have you ever gotten burned by FOMO? If so, you’re not alone! But what if there was a way to avoid those costly mistakes and trade more confidently?
Sarthak Shah, a trading specialist, shares three powerful insights that can transform your trading experience and help you ditch your regrets for good! These insights will help you identify and avoid common trading pitfalls, ultimately leading to smarter decisions and potentially fewer regrets. Let’s Dive In!

Insight #1: Trade Before The Outcome Is Known

Before entering a trade, ask yourself, Is the outcome known? This principle applies to all market participants, regardless of their trading methods or strategies. As the saying goes, Buy the rumor, sell the fact.
Take a look at the above chart. The blue arrow points to a sharp decline that most traders were not prepared for. This exemplifies a suitable starting point. That’s not the case with the yellow-circled area.
This is where the outcome is known and everyone is reacting to the big move down. This is a confusing and volatile zone, best avoided for entries. Why? Because it’s a tug-of-war with opposing views and flawed logic.
Successful traders enter before the outcome is known and exit once it becomes clear. Exiting after the outcome is known also maximizes your profits. Setting a target profit often leads to exiting too early or giving back gains.
So, how do you know when the outcome is known? This is where Insight #2 comes into play

Insight #2: The Market Feeds On Irrationality

The market needs irrational and random behavior from some traders to reward those who understand the game. This chaotic behavior often happens when the outcome is known. When a sudden move catches the attention, there’s a flurry of exits from losing positions.
Understanding this changes your perspective. You stop fighting a losing battle against the market. Instead, you recognize these periods as the market’s way of extracting money. The longer the market takes to shake out these traders, the more fuel it gathers for the next unexpected move.

Insight #3: Disqualification is Key

Most traders focus on finding profitable trades. But successful traders know the real secret: Disqualification. Using a multiple-points-of-evidence approach and following a well-defined playbook allows you to filter out all the outcome-is-known scenarios. This is your ultimate defense against the market’s tricks.
Think about it this way: Instead of searching for every possible trade, identify the one that doesn’t fit the market’s playbook. This brutal, evidence-based approach will keep you away from losing trades.

Ready To Trade With Confidence?

By incorporating these three insights into your trading strategy, you can avoid costly mistakes, develop a more disciplined approach, and trade with greater confidence! Remember, trading is a marathon, not a sprint. Stay focused, follow your plan, and let the market reward your patience.

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