Published on: August 6, 2024

“Market Kyu Gir Raha Hai?” (Why is the market falling?) is a phrase that echoes through the minds of traders and investors alike when the stock market benchmark indices like Nifty and Sensex take a dip. It’s almost a reflex to seek out reasons for the decline. But have you ever pondered the opposite question – Why is the market rising?
The Dichotomy of Market Perceptions
When the market ascends, we often attribute it to grand narratives: India is shining, the economy is robust, and GDP is rising. These big-picture indicators fill us with optimism. We bask in the glow of a booming market, often without questioning the underlying factors. However, our reaction is starkly different when the market tumbles for a day or a week. Suddenly, the same big-picture indicators seem irrelevant, and we scramble to find immediate causes for the drop. But do these macroeconomic factors really change so drastically in such a short span?
The Nature of Market Movements
The market does not move in a straight line; it follows a zig-zag pattern. This inherent volatility is a fundamental characteristic of financial markets. They oscillate, driven by a multitude of factors ranging from economic data, corporate earnings and geopolitical events to market sentiment. As a trader or investor, trading this volatility is a phase where they tumble.
A Process-Driven Approach to Trading
At Definedge, we emphasise a process-driven approach to trading. This means adhering to fixed rules for entry and exit and not being swayed by the emotional highs and lows that come with market fluctuations. When you have a solid process in place, questions like “market kyu gir raha hai?” become less significant. Instead, your focus shifts to following your strategy, managing risk, and staying disciplined.
The Emotional Rollercoaster of Trading
It’s natural to feel a sense of panic when you see red on the screen, just as it’s natural to feel elation when you see green. However, allowing these emotions to dictate your actions can be detrimental to your trading success. Markets are unpredictable, and trying to find reasons for every movement can lead to overtrading, impulsive decisions, and, ultimately, losses.
Learning and Networking with Definedge
For those who seek to deepen their understanding of markets and refine their trading strategies, we at Definedge offer numerous opportunities for learning and networking. Our previous events and training sessions have always stressed the importance of a methodical and objective approach to trading.
If you haven’t had the chance to attend, we invite you to join us at our upcoming MANTHAN event in Pune. This event promises to be an enriching experience, providing you with the tools and knowledge to trade the markets, objectively.