BASIC KNOWLEDGE FOR BEGINNING TRADERS

Hundreds of ads, whether on FB, Instagram, or Google, tempt with copy like "Start playing Forex - just a few minutes a day to make millions". They suggest that investing in the Forex market is an easy way to make (big) money. They tell you that all this investing consists of just 3 possibilities: buy, do nothing, sell. Is this so?

Stereotypically, the word "trader" conjures up images of people standing in the stock exchange building, waving papers and shouting at each other. This profession is not exactly easy to grasp, and thanks to the development of the Internet, it has undergone a surprising evolution.

First of all, there's a significant difference between trading and investing.

To invest is to invest money (usually large sums) for a longer period, with the expectation of profit, supported by a complex analysis of risk factors and the probability of profit. The very word investment is associated with something solid, long-term, serious, and complicated.

Meanwhile, trading is a speculative activity, the object of which is the price evolution of various investment assets.

For various market reasons, some people may think it's difficult to invest in shares. It's not as difficult as everyone thinks. The most important thing in stock trading is to understand a few things: the basics, the technology, the capital, the news, and the rules. Some are irreplaceable.

Rule #1: Never lose money.

Rule #2: Never forget rule #1.

-Warren Buffet

How do you understand it? In reality, making a lot of money only requires taking advantage of a few of the many opportunities. There are over 2,000 stocks on the stock market. The price charts of the last ten years, which can generate money for everyone, show those with potential, those with plenty of momentum, and those that seem worthless. There are countless alternatives. But we must also recognize that no one is in a position to take advantage of all these opportunities. You're more likely to lose more if you want more.

We need to understand that we don't have to jump in and sink to make a lot of money in the vast river of opportunity that is the stock market. There are only a few steps left to take. So there's no reason to worry that you won't make a profit. The key is to be patient, because a temporary loss is not a permanent loss, as long as the market is still there. You understand that once you've adapted to the market, you'll always rebuild your portfolio at the right opportunity. Therefore, learn to be friends with time (as long as you buy logical stocks) today, tomorrow, this week, and next week. Too much anxiety could make you regret missing the real thing.

From a certain point of view, stock investing can be compared to the practice of self-improvement. Acquiring an understanding of principles, technology, capital, news, and politics is necessary to develop the ability to produce large sums of money. These qualities also include self-discipline, patience, prudence, and introspection.

Below I describe a few ideas that can help beginner traders succeed in the market without undercutting other traders from the same position:

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1. Stock Selection Must Be Done Carefully

Never buy shares based on intuition alone, or listen to rumors. You must progressively strive to understand, investigate and interpret the company's ideals, technology, money, and news. There's a saying in life that I believe to be true: you can never make money outside your field. Unless you rely on luck. But money won by chance is often lost by force. Which is essential. Every dollar you earn represents the realization of your vision of the world. Every penny you lose is the result of an erroneous worldview. The greatest justice in our world is that society has 100 ways to bring you together until your cognition and wealth are equal when a person's wealth is greater than their cognition. Each of us fights for information, and knowledge is also obtained through our work.

2. Before Investing, Everyone Must First Become a Long-Term Investor

It has fewer requirements in terms of operating strategies and stock selection, which is ideal for many budding investors. For market investors, stock selection is the first step, and getting to know the weather is the second. You'll undoubtedly make money one day if you don't miss the first step and if you persevere long enough, but the amount you earn will diminish over time. That's just one problem. The short-term benefits of our normal activities are incomparable since long-term operations differ from short-term operations. Monthly income can be 30% in the short term, but only 5% to 10% in the long term.

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3. Every Investor Should Have a General Understanding of Bull and Bear Markets

Even if you don't make any money right away, I advise everyone to invest in the stock market if they want to make money. But over time, the profit won't be so bad. Take Continental's A-stock, which I recently started maintaining, for example. Even though 1/3 of shareholders lost money in 2013, there are currently less than 1/30 of those still losing money if I entered the market in the middle of the bear market at the end of 2011.

If you choose to invest during a bull market, there's a good chance you'll make a lot of money in the short term, but there's also a very good chance you'll lose money in the long term. Don't trade the bull market frequently, looking for growth and destroying the limit, if you have the chance. Because trading costs will deplete your assets in a bear market. The difference between long-term investments isn't very important if the logic of buying shares isn't at stake, but if you trade frequently, whatever the commission, you risk being permanently excluded from the stock market.

So as a new investor who has just entered the stock market, how can we avoid serious losses?

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1. You Must Be Ready For A Prolonged Battle Before Starting

Most of the time, you'll lose if you arrive and run away. Therefore, everyone needs to be mentally ready, maintain a normal mindset and have the right attitude. Don't think this time. I'll leave if I come here and succeed financially. The majority of the results won't be achieved and could eventually be lost if that's the way you think.

2. Keep an Open Mind, Avoid Risks by Not Comparing Yourself to Others

Using God's perspective to make retrospective decisions or considering how much money you would have made if you had bought particular stocks at that time. Also, ignore the index and always opt for your absolute returns and opinions.

3. If There's a Rational Margin in a Bear Market, Don't Give Up Your Chips Quickly

If you want to throw away your chips, the idea is that the stock will continue to fall in the short term due to a technical decline in the stock or a black swan in the fundamentals. If you have the time, you should spend more time studying individual investigative resources so that, through repeated research and reflection, you can eventually become an expert.

4. In A Bear Market, Try To Determine How Low The Stock Price Can Go

Take your time to buy at the lowest price, work harder on your skills, and wait to see what will be best for your future investments.

5. You Should Move Less And Look More During A Bull Market

Avoid frequent position adjustments and repeated buying and selling of stocks, as the danger is too great. You stand to lose a lot if you lose. I hope you won't learn too many new skills as a result.

6. Contrary to a Bear Market, You Need to Understand More Fundamental Information During a Bull Market

Such as industry cycles, accounting and financial reports, macroeconomics, stock market regulations, stock market history, prospectuses, and so on. But if you buy stocks during a bull market and are lucky enough to make money, you may spend more time learning the fundamentals to survive a bear market in the future.

In the article above, I gave you the basics you need to follow when starting your adventure with the stock market.

Once you have the basic knowledge, invest time in learning and gathering information. Read books, take courses, and develop yourself.