In an attempt to amass wealth, investors should know general themes that may help in the long term. We have provided some defining characteristics and other good habits a good trader should attempt to muse over:
1. Preparedness. Have a strategy for entry and stick to it. It’s best to be fully prepared and have it before you do anything - know when you’ll buy and, more importantly, when you’ll sell. When the time comes to do either, stick to the plan.
2. Education. Do you know what you’re investing in? Have you done the research, both on what it holds and how it fits into your portfolio? Do you know the tax consequences and the expenses? Have you researched the fundamentals on your position?
3. Emotions. We all have them, but they should play no role in your investing. Examine the reasons you’re buying or selling. Are you buying because you’re in an excited frenzy, or are you playing the markets with cool logic and waiting for signals?
4. Patience. Success does not happen overnight. It can take years of careful investing. Do you have it in you to wait awhile for results? Are you okay with not getting rich overnight? There are no get-rich-quick schemes in the markets that work over and over again.
5. Risk. All investing carries with it a certain level of risk. Smart investors know their limits. Are you taking on a level of risk that you’re comfortable with?
6. Loss. Traders are not always on a constant winning streak. There are going to be trades that simply never pan out. The questions you have to ask yourself is: Are you comfortable with the idea that you might lose a little? Or are you gripped with fear at the thought?
7. Being able to let go. Eventually, all things come to an end. When the time comes, do you have an exit strategy? Will you be able to confidently say goodbye and either take the loss or use the cash you’ve gained toward something else?
8. Looking forward. Looking back is nice, but past history is no guide for what might happen in the future. Are you looking ahead, always on the hunt for new opportunities? Or are you stuck in the past and waiting for it to come back?
9. Self-control. When it comes time to buy or sell, you should have a plan and follow it. Wise investors don’t rationalize their way out of executing a trade if all the signals say that they should do so. Do you have the discipline?
10. Forgiveness. We’re all human, and we’re going to make mistakes. If you’ve made one, have it in you to dust yourself and move on. Flogging yourself over a bad trade is fruitless - use that energy to find new opportunities.
Disclosure I am long many different etfs.
Some excellent suggestions
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