Trading markets are very exciting. Being able to put your money to work for you has its benefits. Not always having the money in a savings account can be good considering the possibility that the interest rates of the account do not exceed those of inflation.
Keep your costs below your earnings
Although people worry about having a fund so they do not have to work when they are old enough to retire, some do not see that they lose money from the exact moment they start to trade.
For example, if a platform is charging you 1% commission for trading, and your trade was for USD 250, you already lost 2.5 dollars. This is almost impossible to avoid, since the platforms charge commissions to be able to obtain profits and maintain their service functioning.
So, instead of actively looking for platforms that do not charge commissions, it is important to look for those that have the lowest commissions, in order to maximize the benefits of your trading sessions.
Create a risk management strategy
The best trader is not the one who always wins, but the one who loses the least. When calculating the gains you expect and the times when you expect them, take into account the factors that may be inside and outside your control, such as, for example:
Inflation: Unless you are directly involved in the monetary policy of the Federal Reserve, it is impossible to control inflation, so it is a good idea to take into account this factor that makes you lose purchasing power, not necessarily money.
Limit your losses: If you are one of those who like to do day trading, but none of your trading strategies are working for you, it is best to stop. If you have already reached the level of acceptable losses in your risk plan, stop trading, since you would be letting your emotions take you away and you might end up losing more money..
Remember that trading is a high risk activity where you can earn a lot, or lose everything, and without a clear strategy, it is very likely that you will lose everything.
There are other factors you should take into account before you start trading:
Always buy low and sell high: You can not make any profit if you buy an apple at 2 dollars and sell it for 1. For this it is necessary that you have your strategy, given that even a slight movement to the downside, without a strategy and study performed on the operation can unleash panic in you, and cause you to sell at a loss.
Do Your Own Research: Do not take the word of others as true and honest. Many media, influencers and even YouTubers, are paid by projects to speak well of these and rarely communicate to people who are receiving payments to promote.
Avoid falling into FOMO and Hype: FOMO (Fear of Missing Out, Fear of Missed Opportunity) is the term given to the sensation that some people perceive when investing in something that is going up a lot of value. People enter without realizing that this investment is probably a very bad one. Hype is similar, and is caused by the euphoria surrounding the investment. The person ends up entering without analyzing or studying the investment well, which can lead to losses.
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