Module 12   Innerworth — Mind over marketsChapter 1

Introducing ‘Innerworth – Mind over markets’

Most people start trading the markets lured by the prospect of making easy money. But anyone with experience will agree that the stock markets are probably the toughest place to make easy money. You need to have a decent strategy, and it needs to keep evolving over time to stay profitable over hundreds of trades. Each trade is a test of your emotions. You need to keep your greed, fear, and pride in check to ensure you make more on winning trades and lose less when you’re wrong, accommodate the very high trading & impact costs, and so on. 

As you’d imagine, only very few who start trading, succeed, just like people starting any other new business venture. To illustrate, for every successful restaurant around you, there are probably a hundred others who end up shutting down. Similarly,  for every consistently profitable trader, there are hundreds who go bust. What makes trading riskier is that it has a very low entry barrier. Anyone can get started trading, unlike setting up a business, a process that requires a lot of effort. 

Traders mostly focus on technicals, fundamentals, and other such metrics, or rely on advisors for the best buy/sell signals. But nothing can be called the “best” in this business. All strategies and advisors can lose money. The most important aspect of trading isn’t really when you buy or sell, but it is what you do before, during, and after. What happens to the price of the scrip you are trading, isn’t in your control, but how you react is! Very few people talk about this important aspect of trading — Psychology. The study of human mindset and how it functions in terms of identity, beliefs, and behaviors while actively trading the markets is as important as the fundamental and technical analysis, choice of advisor, etc.

Back when I traded actively, Marketwise, a brokerage firm based in the US ran a daily newsletter called “Innerworth — Mind over markets”; short articles written by the best in the industry focusing on trading psychology. Marketwise was sold in 2007 and with that, the Innerworth newsletter which started in 2002 also stopped. All the great content they created for the trading community was lost. These articles have personally helped me get through my drawdowns by helping me remain rational and not fearful, control my greed when I was doing well, and become a better trader. These articles are probably the best that I have read on trading psychology. Concise, easy-to-read, funny yet insightful, and driving home the point of the importance of having a mental edge when trading the markets. 

I’ve always wanted to make this content available to the Indian trader community. After several years of digging, we found David Nassar, Marketwise’s promoter, and were able to convince him to sell us the publishing rights for all the Innerworth content. 

After having waited for so many years, we are super thrilled to once again introduce Innerworth — Mind over Markets, a series of articles on trading psychology. We are starting off by publishing 50 articles under various categories in the Innerworth module on Varsity. We will keep adding to this.

Special Credits to Prateek from LearnApp (our learning partner) for helping us reach out to David and convincing him. 🙂 

 

Happy Trading,
Nithin Kamath

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  1. Ameet Mehta says:

    Bravo Nitin! Congrats to all of us!!

  2. Akash Kumar says:

    thank you sir, I will try to control my emotions !!!

  3. Bharat Baghel says:

    How to take right trade in USDINR option

  4. Vishwam Thaker says:

    What you guys are doing, will help generations of Indians to come. Kudos for being this awesome!!

  5. Manoj says:

    Brilliant! I always love to read and talk about such topics which others (advisors, brokers, anchors, etc.) don’t disclose (be it intentionally or unintentionally). Thanks for writing this Nithin. Would love to read it all.

    • Karthik Rangappa says:

      Happy reading, Manoj. By the way, these articles are from the Marketwise team, and not from any of us from Zerodha. We just have the publishing rights from Marketwise.

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