The last two weeks have been chaotic for global stock markets. China’s benchmark Shangai composite has crashed 42% from its June peak. Hong Kong and Taiwan are similarly down, and the panic is spreading.
Closer to home, Black Monday saw a 1000 point drop in the Sensex, and the Rupee crashing in response to fears about the Chinese and the larger global economy.
What drives markets in this way? What drives the fizzy sense of excitement that creates a bubble, and the subsequent panicky escape that causes the crash? After every crash, we collectively promise ourselves not to be caught up in the frenzy, only to find ourselves in the same pattern of boom and bust five or six years later.
Time and time again, over hundreds of years (dating back to the Tulip market in Holland), humans have interacted with the concept of future gains in irrational ways, buying when they should sell, selling when they should buy, and often losing not just their assets but their peace-of-mind as well.
Why? Ultimately, as humans, we approach the future with two things in hand – a map, which is our past; and a flashlight, which is our emotions. We think these are handy, practical tools to help guide us through the future. However, these are precisely the tools that cause us to remain in an endless cycle of irrational highs and lows – both in life and in trading.
At Tradonomix, our philosophy surrounding trading is different. In trading, as in life, there are ways to transcend the cycle of pain-and-gain, of joy-and-sorrow. Ours is a Zen-like approach to markets – be it stocks, commodities or currencies.
When you focus on any given stock or a market and consciously focus on cutting out all extraneous noise – your own mental machinations, as well as those of pundits and analysts – you begin to focus on the present state of that stock in and of itself. Without reference to its past, or any emotional tie to its future – you focus on the way the stock is moving – up or down. You don’t focus on why, just the what. Once you focus on the what, you achieve a state of unemotional calmness from which you can make trading choices that are driven neither by fear of the past or hope for the future, but merely the complete serenity of the Now.
The key to our philosophy at Tradonomix is simple – Being in the Now, Living in the Present, Going with the Flow.
In the coming days, stay tuned to this blog to find out more about how to stay focused on the present market – yes, even this panic-stricken global Bear market – and learn how to use our philosophy to achieve a state of Zen-like mastery on your portfolio.
Dr. SREEKUMAR RAVINDRAN
Founder and Chief Managing Director at Tradonomix
Dr. Sreekumar Ravindran, known as Saint in trading forums such as Trader Saint Forum & Traderji, is the visionary and mind behind Tradonomix. He is a passionate trader himself and has spent over 15 years in researching and accumulating knowledge of trading and applying the same in real-time.
Dr. Sreekumar strongly believes that trading is a learnt skill and that awareness needs to be created for trading as a profession for the common man. Tradonomix is one of his first steps towards this belief, from where he intends to take Tradonomix to an advanced technology-driven social platform for learning, and achieving financial independence.
Note: Thoughts by Saint, edited and compiled by Rohini Kumar, Head-Content Management, Tradonomix