I have made, in total, a 50% return on my investment, which I’m really quite proud of! During my journey of 5 days of trading, I have learnt quite a lot of things which could be applied to the next time that I trade, the first being the re-assertion, if you will, of the (sorry to repeat this over and over!) importance of emotion in trading. How your day of trading goes largely depends on your mindset. On one day, Day 4 I think it was, I came into trading thinking that “the past two days have been good, it’s probably time for me to have a bad day”. This negative and fixed mindset hindered my trading from my first trade, to be honest, where I lost a small amount of money. After this, it was simply a downward spiral for me, and I placed one frankly stupid trade on EUR/USD.
Contrast this with Day 1, 2, 3 and 5 of my trading where I came in roaring with a growth mindset and achieved substantial gains each day. This is exemplified, most particularly, in Day 5 (today), where, even though I lost quite a substantial amount in the beginning, I persevered and increased my returns by another 10%. That brings me nicely on to my next learning point, the importance of perseverance.
Many a man will get scared and close a trade based on the most minor of fluctuations. To be fair, it was more recklessness more than anything else in the beginning, but, as my trading journey zoomed on, I realised that holding a position for a longer time can have substantial benefits. This could be best shown in Day 3, where I had many positions losing me substantial amounts of money, however, I persevered (you must be getting tired of that word now!) and the losses reversed into substantial gains by the end of the day.
You don’t, moreover, need to make lots of trades during the day in order to make a profit, in fact, one day when I had to go out with my friends for most of it and had only an hour or two at best to trade, I made some of the most profits! The important thing here is to think qualitatively, not quantitatively. I also learned that adding to your position is vital if you want to make large returns. Previously, I was scared to put more money on to a position, thinking that “if it goes wrong, I’ll be wiped out”. As I progressed on my journey, however, I realised that adding to positions can be invaluable if you want to make a profit, and, more importantly, snuff out the losses of previous trades. The penultimate thing that I learned was the importance of technical analysis when trading. Even with my limited knowledge of technical analysis, I feel that I was able to spot the trends of a stock and go long or go short depending on which direction I thought the stock would go to.
A great man once said “one of the great paradoxes of the stock market is that what seems too high, usually goes higher, and what seems too low, usually goes lower.” This only exemplifies and exacerbates the importance of charting, so that you know what direction a stock is going to go in, and, can make profits off of your technical analysis.
Finally, I learned that it is somewhat good to be greedy when trading. There were many occasions in which I had a small profit and could have “wimped out” and taken my small profit, but I stuck with my faith in the direction of the stock and my gains often gained strength exponentially.
Thanks for following me throughout my trading journey, guys! I really appreciate it, and (there’s a bit of shameless advertising here), please like my Facebook page https://www.facebook.com/shreysfinanceblog, follow me on Twitter https://twitter.com/shreyblog and read my subreddit http://www.reddit.com/r/shreysfinanceblog. Stay tuned for my next articles while I learn more and more each day! 🙂