THE General Investment PROBLEM: A common practice of an Investor is to Buy a Stock /Equity Mutual fund with “Investment Perspective/Long Term Mindset” but Revisit the Investment with “Trading Mindset”.
That’s why, What to Buy or What to sell lesser IMP, Than this 3 Step Thought process-
1) Before Investment: What will be My Risk & What will Be My Reward
2) During Investment: Stick to the Investment Plan & Within Framework of Risk Management And Reward Encashment
3) After Investment: Moment you are Out of Investment in Loss Or Profit, Get over it & Move Forward with Learning Experience.
Today, irrespective of caliber and experience, All Equity Investors, Advisors & Brokers can go wrong on Trades/Investment ideas. The most important aspect of What happens to the price of the Stock/Equity Fund you are Investing in/trading isn’t in your control, but how you react to the status of trade/Investment is Extremely IMPORTANT!
Scientifically, Human actions are the outcome of psychological thoughts which are first registered in the subconscious mind which are later Reflected into its Physical Action/Reaction.
INVESTING/Trading IS A REAL BUSINESS, NOT A BLANK CHEQUE WITHOUT lOSS: Most people start trading the markets attracted by the prospect of making easy money, but anyone with experience will agree that the stock markets are probably the toughest place to make easy money.
Investing/Trading is a Real-Life Business that has equal Probabilities of Profits/Losses just like any other Business. Only very few who start Investing/trading, succeed, just like people starting any other new business venture. To illustrate, for every successful restaurant around you, there are probably a hundred others who end up shutting down.
What defines a successful investor is a Defined plan & strategy, a disciplined process & a Rational mindset which outsmarts your Emotions.
One needs to have a Well Researched Investing/Trading strategy, and it needs to keep evolving over time, Each trade/Investment is a test of your emotions. You need to keep your Greed, Fear, and Pride/Ego in check to ensure you make more on winning trades/investments and lose less when you’re wrong.
Investors/Traders should constantly Study & Research Investment Plans, Strategies, Investment/Trade System whether on Fundamentals or Technical Parameters to become Successful Investor/Trader over a Period of Time.
The Investor/Trader then just needs to Follow Investment/Trade System, with Trusting the Trade process and Executing Trades based on those Indicators provided by the System/Software.