Trading stocks and their derivatives can be an emotional roller coaster, and it’s not for the faint of heart. But on the alternative side of things, you can’t just put your money in a savings account and lose it slowly to the costs of inflation. So how can you know when you’re ready to trade stocks and derivatives?
Here are four sure-fire ways to tell
1. You can afford to lose
Nobody plans to lose money trading stocks, but due to unforeseen conditions and markets that change faster than we can react it’s possible to lose money. But even more likely than losing money, is the fear of losing money. If you’re trading stocks with money you can’t afford to lose, then every slight movement of the stock will really put you in an emotional craze, and that’s not good for your trading strategies.
2. You’re hungry to win
If you’re not motivated enough to do well at stock trading, you’ll be a serious disadvantage. But if you’re willing to focus and make continual improvements, you’ll have a great shot at winning.
3. You’re surrounded by support
Whether offline or online, it’s helpful to be around people who understanding trading. It’s as important as it is in any other type of business, to be near like-minded people.
4. You’re ready to learn
Thinking you know it all about investing in stocks is the type of overconfidence that can lead to disaster. We all have blind spots, and it’s impossible to see those blind spots logically, from a first-person perspective. Additionally, the markets change so fast (especially now, with the advent of Twitter and real-time news) that it’s impossible to consume all the relevant data surrounding your stock positions.
Luckily, technological advances have created an Internet-based way of connecting with each other in a relatively inexpensive way. There are sites with information ranging from broad overviews of methodologies to specific company-related insights. Wen it comes to education, you can get a tutorial-based stock trader clinic in two minutes or less.
It’s truly a great time to learn about trading stocks, but you have to be open and ready to learning. If you are, then it’s time to start trading.