Every investor has several characteristics that join to make him successful. The success rate depends on how well you can apply this and how well your strategy works.
The method owned by investors to choose the shares they want in their portfolio is arguably one of the most important fields of being a successful investor. For me personally, I have been trapped to choose shares that lead Ie Blue Chip Companies, whose price history is in a long -term rising trend and who alone does better than the average market.
The next vital component is a trading plan. This doesn't need to be too complicated. You only need to know what you will do if the stock price goes up, down or sideways. If you can discuss these three things then you have the possibility for anything that can be thrown in stock prices to you. And more importantly you will prevent yourself from reacting to the sudden market fluctuations that occur all the time.
The trading plan must also combine the overall strategy for the shares that you have chosen and explain the reasons behind why you do what you do Ie why you decide to place your order level at this special point.
You will need a strong risk management strategy and to be successful in the long run you need to implement a strategy. How many times I see people do not want to act there a risk management plan when the stock price reaches a predetermined value price a little frightening.
The three things above are very good to have but don't forget that you must be disciplined in implementing it if not, you will prepare yourself for failure. And you must remember that to get experts in whatever you need to practice and you need to get experience. Champion is made in training. Not on the track.
After identifying these strategic factors, you must consider how much you are willing to be issued on each share. It is important to try and spend the same amount for each share of $ 5,000 in all 10 stock portfolios in various industries to maintain a balanced portfolio.
Finally, before deciding to continue any investment, you must judge whether the risk to return it is commensurate. There is no point in risking $ 1 to try to produce 50 cents. During my investment period, I was trapped with a ratio of 1: 3. For each dollar that I lost I stood to produce at least three or if I stood to produce $ 3000 from trade, I was willing to take the $ 1000 risk to make it. The reason behind this ratio is that no matter how well you are, you will always lose in some of your investments. Having a ratio like this ensures that when the investment produces their results more than just offering any loss.
To recap every successful investor must show these characteristics in the long run.
Responsible for themselves and make your own decisions. They take credit to generate profits and accept responsibilities for any loss. They learn from this decision and increase from time to time;
Investment or trading plans and stick to them, they make trading plans based on reliable information in calm light and not emotional reactions that may originate from panic or stock market euphoria. And, they remain on their plans;
- Assess the risk ratio/return of each trade that only they enter into investments that offer reasonable profit potential
- Put their money only in financially secure companies
- Buy actions when they are cheap and sell those dear to their price trends
- Only negotiates companies whose prices are upwards
- Exchange without emotion and discipline to exchange the plan. They plan the trade and exchange the plan
- Continue to withdraw money from the market. You only earn money when you sell actions; and
- Have sufficient confidence that has been acquired by experience.
- Manage the risk of every investment. And never lost too much
Allow the possibility in the plan so they know what they will do if the stock traded up, down or sideways. Stock prices cannot do anything else. But you can do what you are planning. The plan then determines actions and prevents unfavorable emotional reactions;