Why Are You Not Successful in Trading?
It is said that only 20% of investments are successful, with the other 80% failing in most cases. Traders who do not succeed in investing tend to exhibit these investment behaviours:
1. Not following investment plans. Traders require discipline in their plans to buy and sell, so that they have their own guidelines for rebalancing the portfolio if the market situation turns for the worse.
2. Not deciding to cut losses. Even experienced investors can predict and map out market trends to the best of their abilities and still be susceptible to unexpected shifts in the crypto market. In the event a wrong decision has been made, if retail investors do not cut their losses at an appropriate juncture, they are unable to stay in the market in the long-term because they may not be able to recoup from the huge losses incurred.
3. Not having an effective money management plan. If prepared well, your money management plan will help you to succeed as planned. Many investors do not have financial discipline and end up borrowing money to invest instead of using their surplus money, while some investors over-invest by using derivatives.
4. Being too optimistic. During the market’s continuous uptrend periods, most investors are optimistic and highly confident in themselves without being prepared to handle the risks that may arise when the market shifts into a downtrend.
5. Lack of investment review. Always review your investments to find mistakes and revise them for the next investment. However, most investors do not do this and thus, some mistakes they made previously occur again resulting in losses which could have been avoideD. Therefore, investors should keep a record of their investment decisions each time to review flaws in their plans.
6. Believing in speculative rumors and news. While keeping up to date with the latest crypto, blockchain and tech news is important, if you do not filter through incoming content, an influx of news may cause confusion, especially when you are making important investment decisions. Be discerning in your news sources and once you have found sources you can rely on, do not be swayed by content from external sites.
7. Looking to make a quick buck. New and young traders often enter the crypto market after seeing some cases of successful crypto investors. They then start to trade with the belief that they can replicate this result in a short period of time, when investors actually succeed after putting in much time and effort in research and constantly adjusting their investment strategies. Luck also plays a part in sudden huge payoffs – success in investments are never guaranteed.
In summary, successful traders usually plan for the long-term rather than speculate on short-term gains. Having an effective plan to manage your investment portfolio is key, as is ensuring that you are on top of the latest news in the crypto market. As the price movements in the crypto market are volatile and susceptible to a wide range of factors, it is no wonder that only the most meticulous and experienced traders succeed.
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