Love it or hate it … the stock market makes (and loses) money for people every day. It’s not just about getting in and out of stocks or investing in a 401K for 20 or 30 years … it’s about developing an investment plan and strategy that will work for you.
With all of this, stock traders can have one of the most exciting, stressful careers imaginable. Full of non-stop action and big ups and downs, it can be easy to feel overwhelmed and get excited by factors beyond your control when you are riding the stock market wave.
Sound familiar? Are you new to trading?
Take a moment to read through our latest reference guide on how to stay cool, calm, and collected even with Pompeii on fire around you. The stock market is a crazy place so prepare well before entering.
There is a psychological phenomenon where some believe that studying a subject too long can leave a gap when it comes to putting theory into practice.
Aspiring traders, for example, run from the book to the classroom to the teacher to find the best trading strategies, but when the time comes to place a buy or sell order with real money, thought and doubt become the order of the day. In this situation, a trader has learned the theory over and over again, but nothing prevents it to keep the mind and body from freezing.
So keep in mind that while you will have to spend hours learning the stock market and various strategies, don’t forget to use a trading simulator where you can put what you learn into practice. This strategy is known as Paper trade And best of all, you don’t have to risk a penny of your own money, so it’s a win-win situation.
Knowing how to react in a simulator can be a little different from a real market because there are different scenarios to consider. Make sure you allow yourself emotional control to keep yourself in check.
The first step in doing this is to make sure you know what constitutes an emotion: stimulation, feeling, motivation, belief, and temperament. Once you understand the concepts, what they mean, you can better understand how to make your emotional state work for you, not against you.
Timing your trades
Market timing is used to maximize profits and offset the risks involved with high profits. It is important that you read up on the importance of market timing and what it means to your own trading strategies.
What times of the day is the largest volume of promotions?
When is Volatility peak And is there a way to use this knowledge to set buy and sell orders? Is there a little window where you can’t be online and ready to go? These are all questions to consider when it comes to timing your trades.
You won’t win every single trade, so be honest with yourself. A successful trader will be right about 60% of the time (and sometimes less), so instead of dwell on your losses, you should Focus on your victories.
Keeping this in mind or repeating it as a mantra is a great way to keep yourself from being too stressed and be your own worst critic.
This is how you keep it together when your trading is in chaos
Ultimately, nobody knows what the stock market will do tomorrow. Some people may think they do, but it really is all a toss.
It is important to remember that you need to have a strategy. Know your limits, what your goals are, and when to get in and out of a trade.
With more attention to the stock market, cryptocurrency and investing than ever before, now is a good time to get started – but make sure you prepare … because it might just be a wild ride!
If you enjoyed this article, be sure to check out my other stock market related articles using the search box on the right side of the page. And of course … these are all just useful information and resources for you to read through. In no way am I a financial advisor or recommend trading advice.