Reality Check:
Investing/Trading is a Zero-Sum Game and based on the greater fools theory if you are not buying dividends. You buy because you seek a profit,** just like the person who sold the stock to you** - the equity stock market and the real world are not correlated to each other but a believed correlation there of.
Once understood, there is more value in knowing how your competitors/other market participants think and act. It's only logical to then track the big players and or the crowd when they are accumulating and distributing.
Risk Management, the reason you stayed **in the Game** is a Minus Sum Game, more than 60% at minimum lose money investing/trading. Having a 10% Loss takes a 12.5% Profit to go breakeven, a 90% Loss takes a 900% Profit to go breakeven.
Risk Management Principles:
1) Assume being wrong until proven correct
2) Add on to Winners, BUT treat them as individual positions
Imp. Metrics:
1) Action/Inaction Ratio for Research = The shorter the Timeframe the less research you make to not miss out, the longer the timeframe the longer the timeframe
2) The more you investigate, the less you have to invest
3) There is never an easy time to make a tough decision
Imp:
1) Looking at Charts isn't investing. Trading is fundamentally different than investing.
Investing/Trading is a Zero-Sum Game and based on the greater fools theory if you are not buying dividends. You buy because you seek a profit,** just like the person who sold the stock to you** - the equity stock market and the real world are not correlated to each other but a believed correlation there of.
Once understood, there is more value in knowing how your competitors/other market participants think and act. It's only logical to then track the big players and or the crowd when they are accumulating and distributing.
Risk Management, the reason you stayed **in the Game** is a Minus Sum Game, more than 60% at minimum lose money investing/trading. Having a 10% Loss takes a 12.5% Profit to go breakeven, a 90% Loss takes a 900% Profit to go breakeven.
Risk Management Principles:
1) Assume being wrong until proven correct
2) Add on to Winners, BUT treat them as individual positions
Imp. Metrics:
1) Action/Inaction Ratio for Research = The shorter the Timeframe the less research you make to not miss out, the longer the timeframe the longer the timeframe
2) The more you investigate, the less you have to invest
3) There is never an easy time to make a tough decision
Imp:
1) Looking at Charts isn't investing. Trading is fundamentally different than investing.