Most people today are phased about the stock market and making money off of it. If you’re reading this, you might classify yourself as one of them too. It’s hard to know if you’re making the right investment if you’ve done your due diligence before parking your money somewhere or even to know if you should lend your money to another company in the first place. Whatever your frame of mind, here’s 3 tips I’ve gathered from my investment experience, learning, teachers and other fellow investors.
Tip #1: The market is your best teacher
If someone offered to teach you how to trade in exchange for a fee, would you think twice before paying it? Even though I can’t hear, see or feel your reaction, (and for the sake of continuing this post) I’m going to assume it’s a no. If you’re a first-time investor and you lose your money to the market, the best way to think about it is as fees you’ve paid to your teacher, here the market, to learn how to trade. A lot of us make a couple of bad moves at times and end up beating ourselves over it. Adopting a lifelong learner’s mindset is instrumental in retaining the confidence to continue to master the art of trading.
Tip #2: Lose or win, learn from either outcome
As much as confidence that comes through as an outcome of a successful trade is imperative to up your morale, it is important to ensure it doesn’t amount to over-confidence. Similarly and in contrast, let not a poor decision made in the process demoralize you to an irreversible extent. The key takeaway here is to learn from your decision in both situations. Use a win to build your confidence and a loss to strengthen trade decision by going back and analyzing what you did differently each time. Make a list of do’s and don’ts to ensure you strengthen your future trade decisions.
Tip #3: Put in the work
To be confident before, during, and after the execution of a trade, it is 100% imperative to feel like you’ve done your due diligence towards it. Be it prior research, number crunching or even following sentiments, covering all trails judiciously will result in high levels of confidence. If you’re a fresher to the field and don’t know much about fundamental or technical analysis, I highly recommend you refer to our ‘How to’ series. Learn from blogs, books, people and experience. Be confident and invest.
Be brave, take risks. Nothing can substitute experience.
Happy trading to you!