Bubbles and market crashes paraded the headlines of financial magazines and created a buzz among financial channels recently.
Trillion dollar markets; stock, forex, commodity, and cryptocurrency shocked the global economy at any one time.
In 1593, Dutch households were introduced with novelty and pricey Tulips from Turkey. Its price skyrocketed with twentyfold increase in just one month.
They traded their hard earned money, life savings, houses, lands and wide area pastures with some tulips believing that there are no limits to its prices.
Tulips price were founded with none, no substance. Market participants realized of its true value, bears dominantly took over the run and pushed down its worth to bottom of the bedrock.
Emotional investing is one of the most dangerous to take, when we let sentiments run your decisions, it becomes distorted.
Trading with goals to pay your bills; rent, utilities and loans makes us so attached with our fund in the market you participated.
The pulse of the market is untimely, it fluctuates every second.
If you see red marks in your portfolios, irrational sell decision comes in and gets frustrated after few hours, the market recovers.
If the market is green, then we let our investment increased in value and after a substantial increase, we wait for another run but eventually the market pulls back.
Then you blame yourself for not taking profit.
What I learned from trading in the stock market?
- Stay away from the monitor. Take a walk. Have some fresh air.
- Don’t trade when your emotionally excited or in needy state.
- Set your buy and sell rules. When trade goes against you, don’t let greed take over. When the trade is in favor of you, it’s good we are able to learn how to make profit but learn to take your profits.
- Don’t put your savings on flowers!
Legal Disclaimer: I am not a financial adviser. All of it were based on my own experience and it may differ for every investor and trader.