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Eight Things Investors Can Learn From Buyers And Sellers

You do not need to be a salesperson to influence them, these days the probability increases.

The combination of factors contributes to it. Increased interest in “historical stocks”, trading activities, fewer stocks for trading, easy access to trading tools, creating more active investors, etc.

During the GameStop news cycle, which traded up $ 483 a share, but has since returned to the $ 40 range, market watchers have been talking about the misconduct of many traders, latecomers, hangers-on and others. bet big and lost.

There were also many good behaviors, types of activities that regular, long-term traders could add to their booklet that would be useful even if they did not follow a trading strategy.

Moreover, if you find yourself in a short-term և trading with your stock that you own as a long-term holding, you need to change your game, at least in the short term, to take advantage of the situation.

This is not a suggestion that the average stock investor should start trading. Countless studies show that investors who resell their accounts end up in both medium and medium-sized vehicle funds and markets.

But you can be a better long-term investor by applying the principles of small, successful individual traders in your process.

Here are eight things a long-term buyer can learn from a short-term seller.

Trading plan. Good traders plan their trades and then sell their plans. They do not allow the market to dictate, they do not allow the winners to strike the right balance of risk, they sell at a profit or loss, rather than allowing the desired mindset to prevail, they compensate for the aggression with patience only when the price, conditions and time they are right.

Buyers’ custodians have an ideal perpetual retention period, and many rarely review their performance: portfolio, so if the stock’s performance is distorted or repaid, they may not make changes until problems are resolved.

Buying and selling investments based on their ability to live up to their expectations is a way to make sure the whole portfolio stays strong.

Use the right tool for the job. Traders are looking for ways to get the most out of each trade, whether it means buying stocks, using options, liquidating the stock market, or improving their chances of success.

Long-term investors often live according to the generals, diversifying their portfolio without thinking more about it than “I do not own such a thing.”

The result is more of a collection of resources than a portfolio where each investment has a purpose.

If the new investment does not increase your portfolio, if it does not play a special role, wait until there is a real, sound basis for investing in new holding companies.

Quantify the risk և reward:. Wise traders are looking for situations where the probability of success is in their favor, when the probable increase is greater than the probable decline if they are wrong.

Imagine buying them when they see a potential profit of 50 cents, but selling if the action goes against them through nickel. If they do not see the potential for much greater victory than they lose, they pass.

Long-term investors set expectations based on the results of the past, expecting a repetition of positive results տեսնել Seeing the years “as bad as it gets”, it seems that things can not get worse.

Have specific expectations for everything you buy, an acceptable range of performance. Knowing what is expected from the asset class արդյունք monitoring results will help to avoid late և mediocre performers who will not confuse the portfolio but will slowly stifle performance over time.

Emot go emotions from it. Traders set boundary orders and pursue plans because it removes emotions from the process. This applies less to “favorites”, mainly tools. As soon as they see a better situation elsewhere, they move on.

Long-term investors allow winners to run, find it difficult to strike a balance, fall in love with what they have been rewarded with in the past, wait for change during downturns – as if it were a sign of success – and rely as much on solid data as on hard data.

Em shafts cause inertia; Do not hang on too long (“Once upon a time it was good for me”) or fall for charismatic managers (“He looked so good on TV”) when the numbers dictate that it is time for a change.

Accept և make mistakes. Traders know that they can not win everyone. they enter trades knowing the approximate loss they will incur if their investment thesis is wrong;

Long-term investors are dependent indefinitely, hoping to recoup losses before the sale, trying to provide good reasons for bad investments. That’s why Americans have at least $ 6 trillion in below-average, backward, mediocre or terribly mutual funds.

Sale in size. Although the headlines focus on traders who bet too much on GameStop, good traders do not do everything. Instead, they sell for a considerable amount of money, enough to get the juice if they are right, without feeling the burn if they are wrong.

Size matters if each investment plays a role in the portfolio. Do not let any investment have too much of an impact on your financial future.

Make a profit“Traders build their profit point in their strategy, knowing when to cash out, or at least take some winnings off the table.

According to the purchase, the shareholders do not sell or make a profit.

If you are not ready to make a profit, you can go down with the next rise. You play to win; Do not be afraid to take your winners.

Remember the strong story? Traders are as good as their next trade. they worry less about individual winners and losers than about moving their account.

Do not get caught in the trade! There is no worthy mark for being a long-term shareholder. Honor comes to investors only if they achieve their financial goals.

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