Tag: trader

Characteristics of a Successful Investor

Characteristics of a Successful Investor

Whenever we talk about someone who has successfully paved his way through investing in the stock market, it is never a matter of having a luck, but rather certain personal qualities or characteristics that determine how successful he/she is. Although, the best investors may seem have been born with the appropriate characteristics, it remains possible to discover and acquire them yourself. Believe it or not, most of what you need to know is just stock market investing basics.

Just remember that you can improve your chances of success. Below are some qualities of a successful investor that you need to know.

  1. They carry a well-thought-out investing strategy

Every successful investor has an over-time-developed-and-a-well-thought-out investing strategy that definitely works and they stick to this strategy. Some successful investors incorporate the portfolio diversification strategy and other follow the portfolio focus strategy. However, you are still entitled to have your own investing style. No matter what strategy you use, make sure that you fully know and understand what you are doing.

  1. They are dedicated

Successful investors are dedicated and concentrated on their investment vehicle. They take it one step at a time and one investment at a time.

  1. They make use of the trend to their advantage

Successful investors know how to use trend to their advantage. Average investors tend to panic over market instabilities, but professional investors welcome these instabilities because it is based on these instabilities that they can make their money. They use trends such as market sentiments, political instability and company’s crisis to their benefits.

  1. They are determined

Indeed, adhering to your investing strategy, whether you are winning or losing needs you to have a great determination. Average investors lack persistence and that’s the reason why they will always remain average. They hop from one strategy to another and are always looking for the next hot tip.

  1. They prosper on risk

It is true that investing is a risk, however, not knowing what you are executing is a lot greater risk. Every professional investor, whether experiencing a winning side or losing side still respect and consider the 50-50 chance of success or failure. The big difference between a professional investor and an average investor is that a professional investor will always invest with a strong risk management scheme in place.

  1. They are disciplined

Successful investors are rigorous with themselves when it comes to investing. Aside from their investing rules and principles, they are also guided and driven by a strong self-imposed standard. Professional investors understand that it takes a huge deal of discipline to stand with you investing strategies, in spite of distractions from self-proclaimed specialists or financial experts.

  1. They know their strengths

Everyone possesses their own strengths and weaknesses. Successful investors understand that it is essential to invest inside their circle of competence. There is no quick way to lose money than investing in something you don’t completely understand. If you couldn’t determine what a company does or how it makes money, then it is often suggested to just stay away, no matter how profitable the opportunity might be.

Learn the Different Types of Trading Style

Learn the Different Types of Trading Style

A lot of people who get interested in trading are primarily acquainted with the financial markets through investing. The purpose of investing is to grow wealth slowly over time, and this has normally been done through  a buy-and-hold approach, making investments and allowing price to alter over time. Investors endure the unavoidable downturns with the anticipation that prices will, in the long run, rebound and rise over the long-term.

Selecting the trading style that best fits your personality can be a difficult undertaking, especially if you are a beginner trader, but it is certainly essential to your long-term success as a professional trader. When you finally found the style of trading that best suits you, a light often turns on and you may never look back. If you are not comfortable with your style or have not found a home in a specific trading style, you are prone to committing the biggest sins of trading.

The difference between the styles is based on the length of time that trades are held for.  Below are the different types of trading style you should learn about to help pave your way to becoming a profitable trader.

  • Scalping

This type of trading style requires trading within just a few seconds of each other, and often goes in opposite directions, as it is a very quick type of trading style. This style is very appropriate for active traders who can decide quickly and act on his decisions without reluctance. Impatient people often are the best scalpers, because they always anticipate their trades to get profitable promptly, and will exit the trade quickly if it is going against their trading whims. To become a successful scalper, you have to have focus and concentration. So, if you are a type of trader who easily get distracted, then scalping is not for you.

  • Day Trading

This type of trading style is more appropriate for traders who like beginning and accomplishing a task within just the same day. A lot of day traders would not think of making swing trade or position trade because if they do, it will cause them to stay awake at night knowing that they had an active trade that could be affected by price movements during the night.

  • Swing Trading

This type of trading style is well-matched with people who have patience for a trade, but once they have started a trade they want it to be profitable quite quick. Traders of this style almost always hold their trades overnight, therefore, those people, who get nervous holding a trade while they are away from their computer, are not fit for this style. Generally, this trading needs a larger stop loss than day trading, so it is necessary to have the ability to get calm when a trade goes against you.

  • Position Trading

This type of trading style is the longest term trading of all the styles and often possess trades that last for years. That means, position trading is very compatible for people who have more patience and least excitement. This style requires the ability to disregard popular opinion because a single position trade will often hold through both bull and bear markets. So, if you easily get persuaded by other people, then position trading is going to intricate on your part.

Aside from the reason that picking a trading style needs the flexibility to perceive if a certain trading style is not working for you, it also needs the consistency to stay with the right trading style even when it is not performing optimally.