Number 1 Winning Trading Habit
I will be starting a series of Winning Trading Habit. I always find that to be successful in trading or investing, you always need get your mindset and habit right. What really differentiate a Master Trader and a Novice Trader is their habit and mindset. Without further ado, i will present you guys the ultimate and the most important habit that needed to be successful in the market.
No 1 Winning Habit - Preservation of Capital
It simply means that you do not lose money to the market. If you did not lose money to the market, then in long run you will be able to make money from those people who lost the money. Some of the famous investors quotes are base on this winning formula.
Rule No. 1 - Never Lose Money
Rule No. 2 - Never Forget Rule No. 1
- Warren BuffettSurvive first and make money afterwards
- George SorosIf you don’t bet, you can’t win. If you lose all your chips, you can’t bet.
- Larry Hite
It is always easy to make money but to keep money is very difficult. People tend to look for entry without thinking and setting the exit. Whenever you go into a trade, you will need to have an exit price. Cut lost fast to preserve the capital. It is fine to lose a battle as long as you win a war. Look far ahead instead of near target. We will always make mistake and lose money. It is part and parcel of the game. The main thing is to make money at the end of the tunnel.
Trading or investing is always related to gambling. So what is the different between Gambling and Trading? Actually there are a lot of different between the both of them yet somehow or rather they are quite similar too. Well when you do not know what you are doing, then you are gambling. This is because you enter a trade base on hope and luck. Gambling in a casino is no different as you hope that you will get the best card or the roulette’s ball will hit at your stated price.
Professional Gambler always make money from the casino. This is because they aim to make a sum of money first. Then after they have make the money, they will use the money to play which will reduce their risk as they preserve their capital. So the most they can lose will be other people money. Playing with other people money will reduce the fear in them.
It is the same concept in trading. Make use of the money that you have make from the market to grow more of it. Trading with winning money will reduce your fear. Preservation of Capital is extremely useful during the bear market as Cash is King. There will be tons of opportunity(stocks) out there for you to buy. Usually people crash and burn during the bear market, thus they fail to capture the opportunity present to them in the bear market.
There is a saying… If you stay in the market long enough, you will be lucky enough to make a sudden windfall. I have been trading for the pass 20 months, I have experience a few windfall during this period of trading. TTWO, GS, GOOG and other have already give me a surprise windfall. I almost make tons of money on BSC put just before the drop from 60+ to 2 dollars. Even in this bear market, My account still up by as high as 15% and now is ding donging at 5% to 10%.
So Trade to trade well …
Preserve your Capital …
If you don’t lose money, money will come to you …
