Knowing Yourself

The first step on your way to investing and trading is to know yourself first. In trading our greatest enemy or our greatest foe is ourselves! Will you be a friend or a foe. Are you equip with the right mindset, the discipline on your buying or selling? Are you more of a risk taker or are you one of the playing safe. What are the things we should know about ourselves first?

1.) Time frame: How long can you wait. Are you patient or impatient. Here we need to practice patience. Even if it is a blue chip, a second liner, a 3rd liner, or a sleeping stocks everything is by patience. Here is where you will see if you lie on the investor side or the traders side. Traders are more about price action and short term of time. They can settle for days, weeks or some months for position traders. Investors on the other hand just sit on their fundamentally sound stock and buy on dips.

2.) Risk Take: Are you the type who can risk too much and play basura stocks for easy money. Or your more of the safe one. The truth is there is no zero risk in stocks. Even blue chips go down by 50% like TEL, SMC, CEB and other blue chips when the cycle comes. You just have to have the proper mindset on what you enter. If you are an investor on blue chips and when the bear cycle comes and it hits your pet what is your reaction? Are you bothered? Are you one of those posting their portfolios in the groups looking for answers. Maybe the answer to that is you chose a different discipline because the truth is you really are not an investor but was just influenced to be an investor because of a book you read, a person you look up to, or was just a mere follower of an investors' group. Actually if you really are an investor and you know the company fundamentally and you know the cycle you will be pleased with how low the stocks fall. PSEi don't fall on the same time. As for my observation the most beaten stocks are the one with the highest upside. Let's sell SMC from 45 it went to a high of 100. Easy 100%. You just have to know where these stocks fall and you can just sleep over them. For traders of course cut loss is your friend especially if you are one who goes to high risk high reward stocks.

3.) Discipline: Are you in control of your trade or you are the implulsive type? Do you make a plan or review the stocks before you enter. Do you have all the elements before you enter a stock like stoploss point, entry price and target price? Do you list the supports and resistances of the stocks beside it on a piece of paper before you enter a trade. Do you just buy the dips or buy the break outs. I am more of the buy the dips person cause when I tried the buy the breakout I lose more especially on an illiquid stock that suddenly become liquid. As my friend said you just buy the support if you won't be given then just leave it be. You shouldn't have the fear of missing out mindset. Just follow the plan and you will be safe.

4.) System: In trading and investing you should have a system on when to buy or sell depending on your own strategy. Don't look for answers around you. Every traders will give you different answer that is why the market price is not consistent and is very volatile. Everyone has their own beliefs. No one really has the right answer. The only one that can answer us is market itself. Develop your own system. It might come from your trading experiences. Your losses or your gains. Review them and see your strength and weaknesses. Where do you win most of the time? Focus on that. Where do you lose most of the time? Avoid that. Always ask yourself where you made a mistake. Is it the timing, is is the stock picking, or other things that can contribute to your mistakes. Whatever it is you should know how to point it out. If you can't point it out then you wasted another tuition that you lose in your past trades.