In the complex and volatile world of trading, having the right mindset is crucial for success. Kim Hyung-jun, a top trader in South Korea with 21 years of trading experience, tells investors about the correct investment mindsets and concepts they should have in order to become one of the few ultimate winners in the harsh investment market.
1.Investment must be made with surplus funds.
In the investment market, being impatient may lead to failure. That is to say, if losses cause inner anxiety, one will fall into a state where victory is impossible. Please always remember that the moment you get into debt, your life will move towards bankruptcy.
2.Remain humble in the investment market.
If one day during trading we suddenly earn a huge sum of money, we might think, “So trading is this easy. Now I can also make a lot of money effortlessly.” But usually at times like this, the probability of incurring losses will increase. The more money one makes, the more humble one should remain in the trading market.
3.Don’t be Greedy.
Humans are greedy animals, so sometimes we have greedy thoughts that we can’t even control ourselves. When we enter the market in an overly adjusted state, we often can’t bear to stop loss due to the stock price crash, resulting in huge losses in the end. Every time I enter the stock market, I try my best to remind myself not to be greedy.
4.Take a rest when there is no suitable trading opportunity.
Day trading brings a kind of pressure that one must make a profit every day. When you don’t see the stocks you want to buy or there are no trading opportunities but you still insist on trading blindly, losses will occur.
5.Trading methods need to be constantly improved.
The trading market is like a living organism in motion. When your trading method is no longer applicable on a certain day, you should know how to be flexible. If you are always stubborn, it is easy to incur losses. As a stock investor, you must be adaptable.
6.Think clearly before buying.
Before buying, think again whether you have adhered to your own principles when buying this stock. Doing so can reduce losses.
7.Be responsible for your own investments.
“This stock will really increase five times in the future. This company is really great!” Whether it’s from the Internet or from friends, you should have heard similar remarks. But after losing money by believing these words, you start to blame others instead. For me, no matter who I hear such words from, I will conduct my own analysis first before buying. I will never buy blindly. People who blame others in the stock market will find it difficult to succeed in the future.
8.Be careful of the news that causes stocks to soar.
Occasionally, there will be sensational headlines in the news like “a certain specific stock will soar”. But if you enter the market after seeing this kind of news, the probability of the stock price rising is less than 20%. If you want to buy stocks based on this kind of unsubstantiated rumors, it is better to wait until positive news appears before entering the market. At this time, the probability of the stock price rising is still 50%.
9.Stop loss can be implemented at any time.
Stop loss is not limited to short-term trading. Even stocks bought through fundamental analysis or company value assessment can be subject to stop loss. If the industry condition is poor or the stock price does not rise as expected, stop loss can also be carried out. In short-term trading, replacing large losses with small losses is equivalent to making a profit.
10.Cash is the best investment target.
Reproduction Notes：InvestFancy » 10 Investment Mindsets That Top Traders Should Have