Stock Trading is neither art nor science—it is unique! If one terms it as science, the unchallengeable findings of scientific experiments need to apply to its functioning. July like the moon-rise and sun-rise can be predicted to the accuracy of a fraction of a second, what will happen at the opening of the stock market on the given day can never be predicted. Is it an art? The scope of the definition of art is limitless and not exact. It is, therefore, difficult to put the functioning of the stock market within the fixed enclosure.
A scientific approach to study the moods and trends of the market is perfect and some beneficial results will come of it which will act as the psychological support for an investor to take trading decisions. As compared to buying, selling is a difficult option and a tough decision. Normally you sell the shares, when you lack confidence with the company in some area.
Where is the road to the land of profits? How to find it and tread without faltering? What is the role of art or science in the life of an investor? Discrimination and strategy appropriate to the occasion are the genuine tools instead of wasting time by bothering about classification of stock trade as art or science. The trade must lead to profits-this is the fundamental objective of an investor.
Normally, approach of no two traders is alike. Some stick to rules, have checklists cut out for every trade. Before embarking upon the trade they would like to see everything in proper place as per their ‘scientific’ formula. Many traders have no written manual at all. They trade with instinct, their sixth sense guiding them in most of the trades. Majority of the day trades fall into this category. They do not have the time to go into charts and analysis. Their past experience guides them throughout the day, to emerge successful at the end of the day. This is the trading art.
The beginning and end of the trades
To catch the beginning and end of the trades is the real test. Stock exchange is like the circle that has no beginning or end. The happenings of the past may have many interesting stories to tell. Some of them could be the lessons for the future but not all. The process of investing, the accounting methods, the trade concepts (from local trades to global trade), the internet revolution, on-line trading—all these have impacted the stock exchange in one way or the other and they influence the investing strategies. But learning is a continuous process in stock exchange, and the one who thinks that he has mastered the tricks of the trade, will be in for a shock treatment by the stock exchange, at the most unsuspected moment.
In fine, trading is an art of knowing the science behind it to make it profitable. Decide about the sum that you have earmarked for dealing in stocks, make a game plan and trade consistently. Measure your results step by step. It will take some time for you to adjust to the trades and know what works for you. By and by, you mill make partial or total modifications in your style of trading. One or two days trading is not going to make the trend. You need not falter with a couple of losses in trades.
As you progress with your trades, a style of your own will evolve. It will be the conglomeration of both art and science of trading. Let your instincts play their rightful role in your decision-making. Try not to dominate them or get dominated by them. The ultimate objective of your being in the stock trades is to preserve your capital and make profits. This can be done by striking proper balance by following rules and obeying your instincts. This is possible by taking trade decisions by giving due respect to money management, forecasting ability and risk management.