The Stock Pathshala class was over. Mentor Sushil now asked the student to raise their hands and ask doubts.
And immediately got the hand-raise from one of the old students, Siddharth.
Sushil unmute the mic, “Hello Siddharth, how are you? It’s been a long time since you attended the class. I hope your trades are going well.”
A calm, confident voice echoed back, “Yes, sir, I have been doing good. Your teachings are helping me a lot.”
“Oh, that’s great!” Sushil replied, broadening his chest, and continued, “Let’s take your doubt now.”
Siddharth cleared his throat slightly, his tone turning technical, “Sir, so as you explained the concept of swing low and high and applying Fibonacci, I recently applied this in one of the trades in commodities.”
Sushil leaned back, giving his full attention. “Okay, go on…”
“I took the entry when the Fibonacci level was 50%, and after that, the price went up by 7%-8%,” Siddharth said, then paused, “But right after that, a long red candle formed — a big one.”
Sushil gave an approving nod. “Good trade. So where’s the confusion?”
“Sir, although I booked around 7% profit, I was not satisfied with an exit strategy, even after the trade, I kept thinking about the same,” he explained in a bit low voice.
“Hmm, alright. Let me ask you something,” said Sushil. “That red candle… did it come right after a green one?”
“Yes, sir, and after that, 2-3 small-bodied green candles were formed, and then the price went down,” Siddharth explained further.
“Okay, red candle opening and green candle closing price were the same?” Sushil asked further
“Yes, sir, and red candle completely covered the green candle,” Siddharth explained innocently.
“Fair, Siddharth, that candle was a bearish engulfing pattern, and that gave a signal that the market would most likely go down.” Sushil explained and continued, “So, your doubt about whether you did right or not, the answer is your exit strategy was correct.”
“But sir, there could be the chance that after the red candle, the market might continue moving upwards,” Siddharth asked in a confused tone.
“Yes, there could be a chance, nothing is 100% in the market,” Sushil said honestly.
“So, in that case, what is the right approach to plan an exit from a position?” Siddharth asked his question more clearly.
Sushil explained calmly, “Well! In that case, you can do two things:
- You can trail your stop loss.
- You can exit half of your position to manage your risk, and if the market moves upward, then you can increase your position sizing.”
“Sir, a lot of confusion, strategy is clear to me, but I am still struggling with building a psychology,” said Siddharth.
“That’s common, Siddharth,” Sushil sir said with a nod. “Here’s what you should work on:
- Trail SL based on price action, not fear.
- If a new setup forms, focus on it instead of the past trade.
- And always decide your SL and exit logic before taking the entry.”
“Thank you, sir. This makes a lot of sense,” Siddharth said with relief.
Sushil sir smiled, “Keep practicing. Strategy and psychology go hand in hand in trading.”
Sushil’s explanation helped Siddharth and others to understand that in trading, it’s not just about entry and strategy, it’s about mindset too.
One good setup can bring profits, but managing exits, reading price action, and staying emotionally balanced is what sets a trader apart.
Like Siddharth, every trader faces moments of doubt. But with guidance, clarity, and consistent practice, you learn to trust the process.
So next time the market tests you, remember—stick to your logic, not your emotions.
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