3 Things to learn before you trade
Since the covid pandemic outbreak, many folks have wanted to make money at home. But, unfortunately, you can’t work in a restaurant, hotel, or office.
I’ve been trading for 12 years, and I know what mistakes people tend to make. I bought my first Porsche Panamera and a house by speculating in the financial market. Now I am still not yet at the age of 30.
This article is not one of those common scams that you will see on daily youtube ads. Although trading is a craftmanship that needs to train, there is a standard process you have to follow to maximize your return while limiting your downside.
This article will briefly explain three important things you need to know before you jump into trading for a living.
1. Never go ALL IN.
All in is where 99% of participants went wrong, and they blew up their trading account because they think going ALL IN is somehow cool and badass like George Soros.
Going all-in does not make you George Soros.
In most scenarios, you end up living in the park, and the landlord will kick you out. It would be best if you did not go all in because most people don’t know what they are trading and the lack of critical analysis to prove and back their decisions.
Betting ALL your money means you can’t afford to make ANY mistakes. Many participants throw all their hard-earned money simply because of one shady insider news’. That is not the reason for going all in.
2. Start viewing trading as a hobby instead of a real job.
When you think trading is a job, you start buying those pricey multi-screens in your bedroom.
You forget one thing. Trading does not provide a daily cash flow to support your daily expense.
When you first trade with a real account, you will make some mistakes.
When you lose money, you will have bad emotional management. So you will start adding bigger position sizes hoping to make up for previous losses.
You make some terrible bets; therefore, your account will be down for 30%, even 40%. To survive, you will start withdrawing money from your trading account to support your daily needs. Soon you will have big trouble; trading will quickly drain your bank saving and your wealth.
Get a job first and start trading in small sizes until you are familiar with all the underlying assets and stocks that you are trading.
3. Be patient about making money
Being patient is a critical quality in both investing and trading. Many people expect to make money quickly and hope to generate a daily return. In my opinion, that is not only difficult but also hard to achieve.
The fact is, 70% of traders spent time trading tiny trends and momentum. However, there are times that you can trade big trends. A good trader should learn to be patient and wait for the right opportunity to present itself. Never force yourself to trade.
To sum up, these are the three essential things you should learn before you trade. Good luck trading!
