Trading and investment are two different things and usually, people mix both concepts. It is a fact that not everyone can be a successful trader as soon as they start their trading journey. Some people learn by doing some mistakes due to greed and some people learn by watching others. I have done both.
In this article, I would like to share some general tips on trading. I'm not an expert trader but these tips are something that helped me see a decent profit at times when I try to do trading. It was hard for me to get started with all these thoughts when I first got into trading. But please note, these are just tips and not financial advice.
Set a goal for yourself
Anything we do should always have a proper goal in the mind. Without having a concrete goal in our mind, we will not be able to achieve something. We might end up wandering here and there without any fruitful outcome. When it comes to trading and investment, goals play a vital role. There should be some reason for us to get into trading or investment. That reason should be iterated well and should be converted as a decent goal.
Some people might do trading for the sake of fun but most of them would do it only for making some profits or to increase their financial status. In that case, setting a proper goal is important. That goal will only trigger us at the right time to book profits or to exit if there is going to be a continuous loss. Setting a goal is also a big motivation. We will be able to see our funds grow and that itself will be an amusing thing.
Think about investing long term
Sometimes when we do an investment, there is a high possibility that the market could fall. Most of the time we do panic selling when something like that happens. This is when long time investment strategy helps. People who are in the crypto world knows how frequent it is that a country bans cryptocurrency and the price would fall. This doesn't mean that we have to completely exit from the crypto world.
For people who have been trading for a long time, China banning crypto is good news. If they have some decent stable coins, they make use of that opportunity to purchase some coins cheaply. So for any investment we do, getting profits in short term is good but let the thought process always be there for the long term. If we hold the tokens long-term and if the market suddenly explodes someday, we will be able to book decent profits and exit.
If you see profits book it
This is the most common mistake that people usually do. When they see a good profit during a green market, they usually wait for some more time and miss booking profits. The market is highly unpredictable. For a moment we would have seen a good value in terms of profit but suddenly after another few minutes there would be a great fall and our portfolio would turn red. This is one of the biggest reasons why we have to book profits when we see it.
This has happened to me several times both for buying as well as selling. I would have seen a good price to sell and book profits before going to bed. I would then wait for the next day morning to close off my position but to my surprise, something would have happened during the night and I would have already missed the train.
Don't directly jump into trading
If you are new to finance and investments, I wouldn't recommend directly jumping into trading. Especially if you are new to the crypto world, I would strongly recommend against trading at least before you understand the top cryptocurrencies. Compared to real-world share market trading, cryptocurrencies are highly unpredictable. There is a thought that for long-term investors it is indeed good but we cannot be sure on that as well. I know a few people who invested during market peak and still trying hard to get their investment out.
Probably you can do some mock trading. There are some applications available that will help us to do some mock trading without doing any actual investments. This will give you some ideas and let you know the basic concepts. Then gradually when the confidence increase, you can start off with small funds and gradually improve.
Find things that work out for you and don't follow the path of others
This is one of the common mistakes people often do. They look for success stories for others and try to follow the same path. In my experience, I have personally lost a lot by doing that. I used to follow the trading paths of my friend and do the exact same investments he does. But most of the time he will end up in profit and I would have sold my positions either a few hours after him or a day after him and would have seen a loss or less profit than him.
I wouldn't say that following the path of others wouldn't work at all but we have to be careful when doing it. Someone with good experience will know when to enter and when to exit the market. If we don't know that trick, following someone will not help us if we only know when to enter and don't know when to exit.
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