Investing at the beginning can be scary, intimidating and confusing, but if you know how to do it wisely then it will be easy to earn. Commitment is essential to control the risk and turn it into a winning result. Whit a little guidance you can understand what to do.
We talked for a long time of the various aspects of trading, analyzing all the factors, ‘what to do’ and ‘what not to do’ and the risks associated with every operations.
The risk is a major factor, but to transform the risk into profit must act wisely as there is no magic formula to earn a lot of money without risk.
Given the countless tools available to invest our savings, it is easy to make mistakes which are often irreparable. The variables and possible combinations, have a profound effect in the degree of confusion at the moment of the choice: the type of investment (bonds, actions, funds, etc.), financial institutions (banks, brokers); currencies; risk index; personal needs; economic crisis; default.
Investing with common sense and wisdom means:
- Choose first and foremost a reliable broker, of which you know the history of stability and transparency;
- As well as those characteristics, the broker must possess a variety of products which are not tied to the interest of the same broker;
- Choose the products that best fit your level of tolerance for risk and better returns of money;
- Get all the information on the products you choose to invest and take the time to metabolize the features and make your choice on your own;
- Check the progress of your investment and make the appropriate changes.
Investing is a very serious matter but also a game that is basically simple. The goal is always to get the most, by investing the minimum knowing that some variables may influence substantially the achievable result.
In the first place, the amount of capital invested is always important regardless the money you intend to invest. As a result, the first rule you need to take is: do not lose money.
Many of the trading psychologists advise to invest on the assumption that our trade will be a losing trade.
Because you have to start a trade in so pessimistic? According to these psychologist, positive thinking can lead to believe there will be a profit for sure and this is the surest way that causes the error.
Another very dangerous positive belief is to think that we can accumulate great wealth in a few successful operations.
The market is not perfect and it is easy to be convinced of the contrary and then run into a loss and blame the market itself. This is not the right behavior to adopt.
Open a task without thinking to the gain, will protect your capital the right extent without exposing too much in a single operation and you will trade with a proper proportion of risk / reward.
Leaving aside this theory, we have to consider a very important element, ie the time.
The duration of a certain type of investment is very important, especially when investing in the stock markets the dividends are reinvested. It is necessary to take all the time to make the right steps.
What most people do is to consider whether to do it or not, enter or exit positions based on emotionalism, if it is ok to accept the suggestion of others hoping to earn a lot of money or hoping not to lose them…of course this is not a way to act wisely on your money.