A common complaint that all of us hear frequently is “Money Not Enough! My recent increment is so low!” Do you know why we always hear this comment? Not only because the increment is so low, the inflation rate remains high and even continue to increase over the years! As such, no matter how hard we work to get the annual increment, it is never enough to combat the high inflation rate. This is further aggravated by the low bank’s interest rate. In fact they are reducing their interest rate over the years.
Therefore, many people are exploring other options to grow their money. One of the options is the stocks market. Basically there are two schools of thoughts when it comes to investing the stocks market – be an investor and invest for long term or be a trader and buy and sell within a short period.
Today, the focus of our discussion will be on trading and recently I read this book titled “Secret Psychology of Millionaire Traders by Conrad Alvin Lim”. When it comes to stocks market, we have to decide if we want to be a trader or an investor. Some people plan to be a trader and end up to be an investor when things do not go well as what they plan. You have to decide if you want to be a trader or investor first before you enter a trade, as both require a different trading strategy. We have to be very clear which strategy we want to take.
We have to decide on the reasons why we want to trade and how are we going to achieve it. You must have a strong “Why” in order to be committed to succeed and very naturally your “How” to be successful will lead you to the path to choose. To be successful trader takes lots of discipline and practice. Even though our aim is to get profits, our basic aim is to protect our capital first. We must have the discipline to follow the process diligently. Always have a trading plan in place and stick to the game plan. We must learn to control our emotions so that when it is time to sell and take profit, we have to take action and not to have the greed to take more. When it is time to sell and cut lost, we should not to hold on the stocks hoping that one day it will go up again. Keep your greed and fear in check by strictly adhering to your trading plan. Our rewards come from consistency and patience. Consistency in trading comprises of sustainability, reliability and practice. We must understand our own psychology and the psychology of the market well.
There is no short cut to be a successful trader, we must persevere and we see you at the top!
