How To Develop

Pooja Loganathan

How To Develop Decision-Making Capabilities?

Welcome traders,

I don't provide any financial advice and have nothing to sell you with this essay; everything below is based on personal tastes. In order to prevent you from becoming one of the many traders who are going bankrupt or already are, I'm sharing material with you.


As a trader, I frequently observed a gap between the appropriate choice and the desired result.

If you've read any of my earlier posts, you know that I advocate repeating profitable transactions and sticking with a winning trading technique.

Your ability to make decisions is your most significant asset. It's what influences your decisions about who to marry, what business opportunities to pursue, which mentors to follow what to trade, etc.

The most prosperous merchants or businesspeople are those who can lose money and yet make it back. Elon Musk, for instance, lost everything before recouping it all, as did Ray Dalio.

The most difficult aspect of trading (and life in general) is that you may make the right choice and still get the wrong result.

Warren Buffet:

According to Warren Buffet, "I wouldn't touch Bitcoin" since it is speculative, has no inherent worth, and would only be purchased if someone else agreed to do so at a higher price. Furthermore, a Bitcoin doesn't generate any money, unlike a stock that does, unlike any real estate that does, unlike a company that generates profits.

Years ago, many who listened to him decided against purchasing Bitcoin. And if you had said that a year ago, it would have been worth much more money.

Was the choice unwise? Or was it because the decision's quality did not match the result?

If you want to improve your decision-making process because one of your prior choices backfired, you must employ the same context and framework for all future choices.

When I say, "I'm now going to be a speculator," I mean someone who purchases items with the intention of reselling them for a profit even when the items themselves have no increased worth.

If I decide to begin making decisions like this, I must consider all the other investments I would have made and lost money on as a result of that framework.

Ray Dalio told me about this initially.

Ray Dalio:

The toughest thing, according to him, is missing an opportunity only to see it succeed spectacularly afterwards.

I would have to apply the same decision-making framework to all the other deals that would have been losers if I had used the methodology that would have made that deal profitable. And having that foundation for making decisions would eventually make me lose.

Because it enables me to distinguish between the outcome and the caliber of the choice, this has been one of the most effective concepts for me as a trader.

Since the majority of speculators lose money, even if I get upset when the value of don't own increases, I console myself by telling myself that it was the proper choice to simply trade cryptocurrencies rather than own them for an extended period of time.

And God's blessings Based on what happened last week with FTX, I was correct.

Reflecting on my trading:

My decision-making process wasn't flawed;

I just failed to take advantage of certain chances and executed some transactions poorly.

In my first year of trading, my father and mentor told me to never utilize fundamental analysis or blockchain research for those trading cryptocurrencies. Instead, they taught me to only trade based on a convergence of indicators.

The chart is the only thing I use to make decisions, and nothing else. When I use my system properly and have a terrible result, I know that over time, my system will produce more winners than losers.

However, I almost always lose money if I trade based on information I find on social media.

Since I've been trading with the same method for over ten years, a list of automated checkpoints determining whether a trade has sufficient momentum, strength, or volume for me to contemplate taking it or not is automatically encapsulated by the convergence of indicators employed.

I'll continue to post a couple pieces like this once a week since they help me organize my ideas and because helping others makes me feel good about myself.

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