In the traditional financial market, the price drop is a very difficult problem because then the assets of investors will be lost a lot, their mood develops according to many emotional levels. it is called market sentiment which was mentioned by Primexbt in the previous post.
It is possible that the initial investments will bring profits to a few new investors, which will drag them into a buying and selling wheel and they are being confused between speculation and investment by themselves.
New investors will think this market is quite easy and they look for new opportunities with higher risk, some even give up their stable jobs to become a day trader.
Inexperienced with real trading coupled with a lack of understanding of market cycles, when markets shake and drop dramatically these investors are scared to watch their investments depreciate incessantly. and paper profits evaporated in the blink of an eye, they didn’t take precautions, nor did they know how to deal with the rapid collapse of the market, and its inevitable consequence was to give up, leave the market , lost faith and, of course, became poor.
On the other hand, a completely different game is mentioned by professional investors. Here, speculation and investment are two concepts that they clearly define and can only invest, not speculate. By their own experience, they have a way to manage capital, how to not fall into psychological traps when trading, calculate when to enter and when to exit and, importantly, to believe in the market.
Everything seems a lot simpler when you have experience or learn from the experts, you understand the process, how the market cycle works, when to sit still and watch the results bloom, when to withdraw capital to preserve capital, when to sell and wait for another bull cycle…
Understanding your difficulties, Primexbt trading summarizes the outstanding issues in investing that every trader should avoid. These issues are essential for both novice and professional traders:
- Think someone can actually predict the market
There is no denying that there are many good professionals in the financial markets. Entering the market you will have a strong belief that we can predict the future, or at least there are a few “living saints” capable of doing this and they can talk and teach you. The truth is, the future is something that is almost impossible to predict on a regular and precise basis. Advice for you to always be responsible for your own assets, no one will teach you how to keep your money.
In all areas of life, many experts often make judgments and predict the future market. However, nowhere are there as many experts as the financial markets and in no area are experts predicting failures more often than in the financial markets.
To be able to make money from the market, you need to have a different strategy for yourself. Just consider the prediction of experts as a possible option and reference but act like what you analyze and apply according to the law of reality: Buy when the price is low and sell when the price is high.
- Don’t try to buy low and sell high.
Buying the bottom, selling the top is something everyone wants, however, in the financial game the people who expect to buy the bottom and sell the top are the ones who miss the most opportunities. They always hold back from investing until the moment they think it’s perfect – the price bottoms out. However, it is possible that the price will not reach there and they completely lose the opportunity to enter the line.
A good expert told me this “When entering the line you should consider the risk, raise and put down 5 7 times, but when deciding to sell, you should be straight and determined that this profit is enough for you. Well, even if I go up, I won’t regret it because it’s difficult in the financial market to make money and it’s harder to keep earned money, so the profit is automatically won.
- Fear of making mistakes
No one in this world likes to make mistakes, neither do you. However, plan your direction with a specific, clear portfolio. Before deciding to invest in something, do some serious research on it: who are the big investors, who are the founders, the potential profit it can bring and the highest risk you can take. acceptable for investment. The important thing in this market is not how much profit you make, but how much you don’t lose. Keep the winning field greater than 1, the results will come soon.
- Independent operation
As mentioned above, crowd psychology is something that every investor needs to grasp and to be successful, in this financial market we have to think like a big investor, operating in the opposite direction. back to the crowd and quite alone “Be greedy when others are fearful” you understand this sentence.
At sensitive times, sometimes information from many sides shakes us, this is the most important time, you have to be alert to fight, filter negative information from the media and public opinion, give correct investment or withdrawal decisions.
Sensitive times such as the transition from uptrend to downtrend or vice versa are when the financial market has the strongest volatility. Many new investors enter the market and many investors who cannot stand the rigors will leave the market. It is for that reason that many professional investors have forged exceptionally strong and disciplined personalities.
It is simply buying and selling, so most people think that investing is a very easy job to do. Because of that, many people, after a few words, will confidently think that they are very good. Numerous studies on overconfidence show that the less we know about something, the more likely we are to overestimate our abilities.
The truth is, investing is by no means an easy or difficult word to use. It requires education, experience, diligence and patience, and a bit of luck as well.
Investing is a process and that means we won’t get instant rewards.
Like if you spend 6 days sharpening your knife and it only takes 1 day to cut down a forest instead of holding a dull knife and losing a lot of energy, it is also difficult to cut down any trees. You understand that something that’s too easy, too fast is often not sustainable and doesn’t work.
Investing is long term and stable and profitable after a while so you need, really, to be patient.
- Possessing unrealistic expectations
High rates of return are fertile ground for the most unrealistic expectations of novice investors, but they do not understand that the higher the return, the higher its risk. It is also the reason why new investors are easily deceived by advertising systems that promise unrealistic passive returns.
Warren Buffett is the greatest investor of our time and no one can dispute that. From 1965 to 2011, his reported return was around 20%. Therefore, any investment that gives a return higher than half his rate of return can be considered good. In the past, he’s shied away from crazy expectations during the booms of the tech and internet bubbles. Many people at that time mocked the old man and couldn’t do anything more. But, in the end, it is they who are the fools.
The key to successful investing is to buy when prices are low and sell when prices are high. However, to do that is not easy. Remember these things to be the key for you to continue on the path of financial investment:
Don’t think that someone can predict the market
Don’t expect to buy low and sell high
Fear of making mistakes
Don’t be too confident
Have unrealistic expectations
P/s: Part of the article is inspired by the author: Colin Nicholson
A little bit about us:
Primexbt trading was born a few years ago but it has soon established itself in the financial market. Here, you can trade from cryptocurrencies, forex, commodities and indices… Outstanding advantages of Primexbt trading such as: beautiful interface, easy to use, low fees, leverage for home use. investors make money even when the market is down, complete set of supporting indicator tools, Primexbt convesting technology helps new investors to refer to trades of professional investors, Primexbt turbo technology allows demo investors before entering actual orders……
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