In the world of trading, Abid’s journey began unexpectedly. After completing his MBA during the challenging times of the 2008 global recession, job opportunities were scarce. I had never considered trading as a career option until circumstances led me to it. With a background in marketing, his job prospects were limited due to the recession’s impact. During a final interview with the Reserve Bank of India (RBI), he unintentionally found myself in a conversation about trading.
The CEO of an RBI subsidiary, an experienced gentleman, interviewed me.he had no prior trading experience and no belief in my trading abilities. Abid was forthright about my lack of knowledge and confidence in trading. This honesty set me apart from other candidates who professed unwavering confidence. This CEO was taken aback by my candor, as everyone before me had claimed confidence in their trading prowess.
The CEO shared a valuable insight: Overconfidence is a pitfall in trading. He emphasized that a successful trader doesn’t need to start with confidence, but rather with a willingness to learn, adapt, and grow. This encounter shifted my perspective on trading. He realized that trading isn’t about unwavering self-assurance, but about embracing humility and continuous learning. He joined the RBI subsidiary, beginning my trading journey with an open mind and a determination to acquire skills.
His journey, from a humble start to becoming the CEO of Sensibull, has been marked by this principle of approaching trading with humility and a thirst for knowledge. It’s a lesson I carry with me and share with aspiring traders: Don’t let false confidence guide you, but instead, be open to learning, be adaptable, and always seek to improve.
Embarking on his trading journey, he found myself in an unexpected turn of events. The CEO’s words echoed in my mind: a successful trader doesn’t need to start with confidence, but with an open mind and a willingness to learn. As my journey continued, he was introduced to the world of trading through the subsidiary of the Reserve Bank of India known as the Security Trading Corporation of India, trading in government bonds.
My first day on the trading floor was a whirlwind of uncertainty. The CEO handed me a staggering 10 crore rupees and simply said, “Do whatever you want.” The weight of this responsibility was immense, especially for someone who had never seen such a substantial amount. With minimal guidance, he navigated through the trading day, only to end up with a loss of around 70-80 thousand rupees. While not financially catastrophic, the impact was significant for a recent graduate in 2009.
When the CEO returned, he didn’t immediately inquire about the financial outcome. Instead, he asked if the money was lost. Upon my admission, he responded with unexpected understanding. He explained that this was the cost of learning and assured me that the company would absorb the loss. However, he made it clear that this mistake should not be repeated, emphasizing the importance of setting stop-loss orders.
Reflecting on the day’s lessons and challenges, Abid realized that the trading floor held an excitement and unpredictability he had never encountered. This newfound enthusiasm contrasted starkly with his prior reluctance towards trading. As the government bond market closed that day, a wave of realization washed over me. he understood that trading, even with its ups and downs, offered a unique blend of risk and reward, a world where strategic decisions carried real consequences.
That day marked a turning point in his life. From doubting my capabilities, he was gradually embracing the mentality of a trader who acknowledges the uncertainty of the market and values continuous learning. The CEO’s unconventional approach to guiding me, the novice trader, had ignited a passion within him.
The trajectory of my trading journey continued to evolve, as he navigated through various experiences. After the remarkable start with the Reserve Bank of India’s subsidiary, I recognized the profound lessons trading had to offer. The insights gained on that initial trading day, where I learned the importance of stop-loss and humility, laid the foundation for my future endeavors.
Abid transitioned to a position at ICICI, where he delved into managing options portfolios, including currency options. The intricacies of exotic options and diverse structures captivated my interest and honed my skills. This phase of his journey taught me versatility and versatility in trading, as we handled a range of scenarios and strategies.
The urge to trade in the heart of the Indian markets led me to IFL, where he embraced trading in the USDINR pair. This experience was exhilarating, and our team managed a substantial portion of USDINR trading on the NSE, contributing to the market’s dynamics and challenges. As the market experienced turbulence during the taper tantrum, he witnessed the impact of economic shifts on trading firsthand. The rupee’s value plummeted, and downsizing became inevitable. Amidst this, he recognized the thin line between thriving and facing adversity.
Confronted with the decision of quitting or enduring potential downfall, Abid opted for the former, recalling the adage: “You either die a hero or live long enough to become a villain.” He didn’t want to compromise my principles or see my trading career wither. With a pragmatic perspective, I chose to venture into uncharted territories. This marked the turning point as I bid farewell to my trading career, unsure of the path ahead.
Returning to my hometown, he embarked on a new chapter, driven by a desire to explore unexplored horizons. This transition marked the end of my trading journey and the beginning of a fresh narrative. It was a decision rooted in a mix of introspection and determination, a reminder that one’s journey rarely follows a linear trajectory but is shaped by the interplay of experience, adaptability, and the courage to embrace change.
Following my intriguing trading journey, he embarked on a search for clarity in life, seeking meaningful purpose beyond the trading desk. Inspired by a friend’s audacious idea to ride a bike from Kerala to Ladakh, he embarked on a journey that ultimately revealed the lack of true clarity in my life’s direction. Realizing that I needed more than a cross-country adventure to discover my path, he returned to Bombay and sought guidance from my former boss, an esteemed trader.
In our enlightening conversation, he shared a profound perspective that left a lasting impact. He emphasized that a professional trader’s role was akin to playing cards – sometimes winning, sometimes losing, but not necessarily contributing value to society. He urged me to contemplate whether I wanted to spend my life merely “playing cards” or creating tangible value. His words resonated deeply, for they stemmed from a seasoned trader who recognized the philosophical implications of the trading life.
This introspection led him to consider what I could contribute to society beyond trading. He recognized the need to address the prevalent issue of unprofitable traders in India. Armed with the desire to create value, he co-founded Senseable in 2013 with the mission to transform struggling traders into profitable ones. However, regulatory obstacles temporarily paused our journey. Sensing a worthy mission, we relaunched the venture in 2017, determined to revolutionize the trading landscape.
Navigating the world of trading,he encountered a pivotal lesson that reverberates through the attitudes and perspectives of aspiring traders today. Reflecting on a specific period of my trading career, a profound shift in mindset became evident when targets were introduced. Up until that point, the absence of targets had allowed me to navigate the markets with a carefree approach. Profits flowed effortlessly, and there was a sense of detachment from the outcomes. However, the introduction of numerical targets disrupted this equilibrium.
As targets were set, a remarkable change occurred. The same trader, trading the same asset classes, faced an unexpected psychological challenge. The pressure to achieve the set numerical goals led to a series of losses, undermining the success trajectory that had been established earlier. This experience shed light on a crucial aspect of trading psychology – the influence of personal significance attached to trading outcomes.
The critical lesson I gleaned from this period was that trading with money that holds personal significance or is earmarked for specific purposes can significantly alter trading behavior. When money becomes tied to objectives beyond trading, such as education, car purchases, or life goals, the psychological burden of expectations can lead to errors, misjudgments, and undue stress.
His advice to those aspiring to succeed in the trading realm is twofold. First, avoid trading with money that carries emotional or personal significance. Reserve trading capital that you can afford to put at risk without compromising other life goals. Second, cultivate a mindset that isn’t overly fixated on numerical targets. While having goals is crucial, focusing solely on meeting them can lead to counterproductive outcomes.
The genesis of Sensible marked a transformative shift in my journey, as I harnessed my trading experience to create a platform that would empower traders and elevate their success rates. Born from a commitment to address the staggering statistics of unprofitable traders in India, Sensible embarked on a mission to guide traders towards consistent profitability. However, its inception in 2013 was met with regulatory hurdles that temporarily halted its progress. The idea lay dormant until 2017, when Sensible was reignited with renewed vigor.
Sensible serves as a comprehensive platform that equips traders with a suite of tools and knowledge to navigate the complexities of the market. The platform integrates analytical tools, educational resources, and a supportive community to foster skill development and prudent decision-making. By providing traders with the necessary tools to develop disciplined trading strategies and risk management techniques, Sensible aims to transform the vast majority of loss-making traders into profitable ones.
Our vision is simple yet ambitious – to alter the narrative of trading in India. We are dedicated to creating a paradigm shift by instilling discipline, knowledge, and mindfulness in traders. This vision aligns with my personal belief that trading isn’t just about financial gains; it’s about nurturing the psychological and strategic acumen required for success.
Today, as Sensible’s reach extends across the nation, the platform is empowering countless traders with the right mindset and tools. Through Sensible, we strive to imbue traders with the essence of trading – a serene, detached perspective that focuses on sound decision-making rather than chasing profits. By offering a holistic approach that nurtures skill development and mindset evolution, we are steering traders towards profitability while fostering a resilient, growth-oriented trading community.
From the outset, our shared vision has been unwavering: the profound impact of loss on an individual’s emotional state. This truth became startlingly apparent during a pivotal moment at the trading desk in 2011. I vividly recall the instant I lost 50 lakhs in a mere 20 seconds—an experience that left me momentarily stunned. Though the funds were not my personal assets, the magnitude of the figure, particularly stemming from my humble beginnings, was overwhelming. The screens displayed a staggering negative balance, a jarring shift for someone from a modest background. In a twist of fate, 30 lakhs returned within the next minute due to a sudden dollar spike, etching this incident indelibly in memory.
Yet, what lies beneath the surface of such trading mishaps is a profound psychological conundrum. The disposition effect, a cornerstone of behavioral finance, delves into the intricacies of human behavior when confronting gains and losses. As it turns out, people experience joy at receiving 1 lakh but distress amplified to 150 when parting with the same amount. This stark contrast underscores our intrinsic aversion to risk. The crux of the problem is evident in the reluctance to employ stop-loss strategies—a phenomenon rooted in the fear of “giving up.”
Within the framework of trading, a stop-loss is not merely a strategy; it is an admission of defeat. As long as a trade remains open, hope persists, and surrender is deferred. The psychology governing human behavior leads us to strive for solutions in the face of adversity. This instinct, though adaptive in many scenarios, becomes perilous in trading. When losses accumulate, our impulse to rescue the situation takes center stage, perpetuating our aversion to stop-losses. While this response is intuitive, it paradoxically results in compounding the losses. The irony lies in the realization that departing from a losing trade is not an admission of failure; rather, it is a strategic move to mitigate potential harm.
In 2011-12, I witnessed numerous individuals succumb to mental strain due to trading setbacks, a phenomenon not confined to professional traders alone. The allure of turning losses around, coupled with the fear of acknowledging defeat, forms a psychological vortex that pulls traders deeper into the abyss. This cycle underscores the urgent need for comprehensive trading psychology education, targeting the disposition effect and its consequences. By addressing these deeply ingrained psychological tendencies, we can empower traders to embrace stop-losses not as an admission of failure, but as a calculated means of safeguarding against escalating losses. Through understanding the intricate interplay between our risk-averse psychology and the world of trading, we can begin to reshape a narrative that values strategic exit strategies over blind persistence.
The inception of our solution, Sensible, stemmed from a resounding realization: the crucial need to address the psychological aspects of trading and the destructive potential of unchecked losses. Our collective experience illuminated the unsettling pattern of traders forsaking stop-loss measures, leading to mounting losses that spiraled out of control. This phenomenon, akin to the infamous Yes Bank stock plunge from Rs. 400 to a mere Rs. 5, was emblematic of the widespread dilemma. Even with sound advice on setting stop-loss points, traders often defied these safeguards, yielding to impulses to adjust, tamper, or compound their positions.
In this landscape of volatility and uncertainty, we recognized the dire need for a tool that could mend this psychological gap, one that could ensure losses remained within manageable limits. Our pivotal insight lay in the combination of well-devised option strategies and disciplined risk management. Through these two pillars, we aspired to revolutionize trading outcomes for myriad individuals. The idea was not to eliminate losses, but to shield traders from the paralyzing impact of significant losses that could shatter their resolve and confidence. It was a mission to help traders navigate the early stages of trading without the cataclysmic pitfalls that could deter them from learning and growing.
Our solution’s bedrock is grounded in the belief that controlled risk can catalyze informed decision-making. Sensible seeks to empower traders to embrace stop-loss strategies not as a defeatist retreat, but as a strategic maneuver to shield their financial well-being from unchecked downward spirals. By adhering to well-structured option strategies and fostering an understanding of risk management, traders can weather market volatility with resilience and purpose. Furthermore, the lack of knowledge among traders regarding diverse strategies and instruments posed another significant hurdle. Sensible is committed to bridging this knowledge gap through education, providing traders with insights and tools to comprehend the intricacies of option trading and execute a range of strategies.
Through our collaboration with industry experts, including the esteemed CEO, we aim to make trading a less treacherous journey for both novice and experienced traders alike. Sensible’s integration into trading practices not only safeguards portfolios but also fosters a mental framework that values discipline over impulsiveness, knowledge over ignorance. As we traverse this evolving landscape, our purpose remains steadfast: to empower traders with the wisdom and tools to maneuver through the complexities of the market, preventing the cataclysmic blow-ups that can obscure the path to financial growth and prosperity.
In the quest to become a professional and successful trader, the significance of a solid mental framework stands as a fundamental cornerstone. The understanding that trading decisions are intricately tied to psychological elements cannot be overstated. Harnessing this realization involves recognizing the impulse to tamper with trades and the necessity of adhering to disciplined stop-loss strategies. This self-awareness goes a long way in circumventing the pitfalls of unchecked losses and preserving one’s mental well-being amidst the unpredictable market fluctuations.
However, this mental aspect is just one facet of a multifaceted approach. Delving into the realm of options trading offers invaluable insights. A key revelation lies in the power of a larger trading account balance. This somewhat unspoken advantage often separates successful businesses and traders from the less fortunate ones. With a robust account, traders gain access to opportunities and strategies that can mitigate risks and maximize returns. A strategic approach such as selling call options can provide a steady passive income stream. This approach involves a conviction that certain market scenarios won’t materialize, akin to an insurance policy. By leveraging the potential of a sizable account, traders can make calculated moves and navigate the intricacies of the market with more freedom and confidence.
This principle extends beyond options trading. Approaching the market with a mindset of “this won’t happen” rather than predicting outcomes not only aligns with proven practices but also provides a psychological advantage. Just as LIC insures individuals with the understanding that certain events won’t transpire, traders can position themselves to capitalize on scenarios where movements are constrained. This approach, as exemplified by selling call options, emphasizes managing risk and steady returns rather than the uncertain territory of predictions.
Ultimately, becoming a proficient trader demands an amalgamation of disciplined psychology and astute strategy. The awareness of the psychological pitfalls, coupled with the understanding of the advantages that come with a well-funded account, sets the stage for a trader’s journey towards professionalism and success. These insights not only refine trading practices but also cultivate a mindset that values risk management, opportunity identification, and measured decisions. By embracing these principles, aspiring traders can pave the way to a future of informed trading and sustainable growth.
The pursuit of becoming a professional and successful trader demands a comprehensive understanding of not only strategies but also the capital required to execute them. A pivotal insight emerges: if one’s capital is limited, it’s imperative to refrain from trading. The truth remains that effective trading necessitates an ample account balance—typically in the range of 2 to 3 lakhs—to unlock various instruments and strategies. This opens doors to making calculated decisions instead of resorting to the limited choices often driven by constrained capital.
A key principle is to position oneself against unlikely scenarios rather than making predictions. However, this requires access to a spectrum of instruments, which is only possible with sufficient capital. A common pitfall is the temptation to engage in buying put options without considering the broader range of available options. It’s akin to buying insurance policies without a comprehensive understanding of their long-term profitability—a practice that insurance giants like LIC thrive upon.
Furthermore, adopting a meta approach to trading can be transformational. This approach embraces patience and restraint, refusing to trade for the sake of trading. The most successful traders often demonstrate this quality by refraining from trading on more than half of the available trading days. This method allows them to seize opportunities that genuinely align with their strategies and let go of the fear of missing out.
Lastly, the sage advice to trade when there’s ample opportunity and capital can’t be overemphasized. It’s a philosophy grounded in the understanding that quality trading is preferred over high frequency. Learning to wait for the right circumstances and maximizing the potential of one’s capital underscores a professional trader’s journey toward success. Ultimately, a disciplined approach to capital, a strategic stance against unlikely outcomes, and a patient attitude culminate in the path to becoming a proficient, professional trader.
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