I call myself an occasional trader.
Some prefer the term 'part-time' since they have their main job aside from this investment.
I call it occasional just like the occasional drinker: you could go on for weeks without it, and then suddenly daily for the next 2 weeks.
I trade through the stock markets and forex since I want to have that future flexibility in terms of financial and also for personal freedom. I learned that by putting all your savings in the bank, it will be eaten up by inflation. Whilst still a rookie on the field of trading, little did I realise that the lessons I pick up along the way can be applied in everyday life.
The wisdom of the most successful traders such as Warren Buffet can be translated into simple lessons.
Some prefer the term 'part-time' since they have their main job aside from this investment.
I call it occasional just like the occasional drinker: you could go on for weeks without it, and then suddenly daily for the next 2 weeks.
I trade through the stock markets and forex since I want to have that future flexibility in terms of financial and also for personal freedom. I learned that by putting all your savings in the bank, it will be eaten up by inflation. Whilst still a rookie on the field of trading, little did I realise that the lessons I pick up along the way can be applied in everyday life.
The wisdom of the most successful traders such as Warren Buffet can be translated into simple lessons.
The Wolf.
1. Moderate your greed.
When you start to win and gain advantage, your greed will be tested. Shall I push and wait for more gains? Only to risk everything else and your advantage could be wiped out and reversed in the blink of an eye.
Set your goals to be specific and realistic.
2. Stop-loss/Cut-loss.
This is when you've already lost on your trade or position and decide to accept that it won't go any higher. If you're 100 down, it's better to walk away 100 lighter, than risk it to grow worse. It can be also termed as '1 step backward, 2 steps forward.'
Your loss today doesn't mean it's all over.
3. 'Comparison is the thief of joy'
Not exactly used in trader's circles. And definitely Theodore Roosevelt wasn't trading when he uttered these words. But in the trading game, if you would compare your performance with a seasoned trader, it won't be as rewarding as it could be.
For false belief that you did better will provide arrogance or fake confidence. Whilst feeling down due to another's success is a negative habit of jealousy and envy.
4. Study. Prepare. Repeat.
In trading, there would never be enough resources in gaining all the knowledge. You will come across hundreds of 'expert' people selling their books in how to 'teach the secret' to success. I am not discounting or disregarding their credentials. But at the end of the day, it'll be up to you on how to apply it. Self-study and preparation won't hurt too.
A dog will never be too old to learn new tricks!
5. Hindsight is always 20/20.
I once sold a stock that I thought won't go higher than its price. I sold it and gained from it and I felt good. Fast forward 3 years later, it more than doubled its price. I started computing my 'shoulda-woulda-coulda' and felt bad later on. Then again, I tamed my 'greed' and tried not to put my misjudgement too much weight.
No one can foresee the future, but looking back at the past doesn't also mean that we were either wrong or right. I decided then at that time that it was the best decision in that given opportunity. We have way too many 'what-ifs' in life already.
Make it rain.
6. Be frugal.
Before, I won't think much of buying things that I want. Emphasis on 'want', and not 'need' such as food. Want such as the new playstation, new shoes, new clothes, new gadgets. After getting into trading and valuing every centavo of my hard-earned money, it has put things into perspective for me. I would think more than twice that a 100£ shoe would probably buy 1000 shares of a certain stock. I started to compute in stock prices. And it helped.
When I buy things, I make sure the usage and quality will be for a long time. For the gifts I have bought for myself and my loved ones, I made sure that they will last for a number of years.
7. Discipline.
Trading requires discipline in decisions, in strategies. It will make you think quicker, act faster. But you need to train your self to have a steady mental state. You will control your emotions. In a turbulent and volatile market, the more that you lose focus will only cause worse damage.
Sometimes, it is also wise to step back and abstain from trading for a day. It will only be learned as the going gets tougher.
8. Work smarter not just harder.
I started trading because I don't want to work until I'm 80.
Why? Because I want to retire early.
Why? I want to be more stable and secure in the future.
Why? I want to have more time for myself and for my family.
Why? Because those times will be the best investment you could ever have in life.
I want to learn how to trade too but it always hard to start alone, from scratch I mean. I don't want to grow working for a company and rely my wealth to them. Maybe if I have someone, a close person, who invest in stock markets then I will try too (an inspiration).
ReplyDeleteThat sounds great. It always starts with an idea, and that desire to plan ahead. I had no one to start with apart from an actual advise from an ex-colleague. I youtubed and googled, and finally took the plunge. You could be THAT person that would inspire your friends. Good luck and caveat! ;)
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