Capital Markets Insights | 16 Dec - 20 Dec
Get stock analysis and detailed markets insights to make confident investment decisions
Trading Tips: What every New Retail Trader Needs To Know.
Trading tips to improve your investing strategy and unlock your wealth potential.
I've been in the markets for 9 years, with 4 of those as a Hedge Fund Trader. I've made and lost money so many times you'd think I'd be paranoid to still be here. But for me, it's just a game—the most sophisticated, interesting, entertaining, and difficult game in the world. It builds character. You reset yourself so many times, and your traits as a person will determine whether you succeed or fail.
Your personal traits determine your longevity and endurance in this war-game. About 90% quit within the first two years, and there's a reason for that.
If you think it's all about brains, data analysis, or reading balance sheets, you're mistaken. It's about the following:
- Your perception of the world, how it works, how your philosophy fits in, and how you position yourself.
- Knowing yourself—your investing/trading style based on your characteristics. Don’t lie to yourself.
- The most important organ is your stomach, not your brain.
- Understanding how greed and human psychology work.
- Your risk/reward is not enough. It’s also about time-risk/reward strategy. How many hours are you on top of the screens? for what result?
Here are a few tips that have transformed my portfolio, and I haven't lost money since implementing them:
- My trades last days to months—no day trading. Don't compete with the algos.
- If you want to use leverage, do it for long positions in big companies like MSFT, GOOGLE, etc., which are more stable and have less risk.
- Never go short and bet against the US. Always go long.
- Money is made in bear markets when you buy during bloody corrections. In bull markets, you just see the results of your positioning.
- I don’t use stop loss because my leverage goes max 2x.
- I only trade US stocks, nothing else.
- When opening a position, divide it into 3-4 smaller ones. For example, if you have $1k, open a position with $250, let it play out for a day or two, then add another $250, and so on. This way, each position has its own risk-reward, and you can exit or build it more easily.
- I don’t diversify; I make concentrated bets.
- Keep it simple. Don’t make your charts and strategies complex. I just use RSI and volume.
- Averaging down works in qualitive companies.
- If the market is going up and your small stock doesn’t run, jump off and find another opportunity. Remember the cost of missed opportunities is worse..
A few more thoughts...
Rejection is taken personally by those with poor self-awareness and big egos. As ego subsides and self-awareness increases, your mind grows..
Ego is the enemy in investing or trading. Just kill it!
It's not about being right or wrong but how much you make when you're right and how much you lose when you're wrong.
Sometimes the obvious is obviously wrong. Try not to be biased and closed-minded.
And my personal favorite... Adapt, compete, evolve, or die.
Disclaimer: This is not financial advice. The information provided is based on personal experience and should be used for educational purposes only. Always do your own research and consult with a professional financial advisor before making any investment decisions.
Related Posts
Capital Markets Insights | 9 Dec - 13 Dec
Get capital markets insights to make confident investment decisions