Here's the "Magic Number" for Applying Capital
by Tom Gentile
2% of your money is absolutely the way to go.
Source: Money Morning
https://moneymorning.com/investing/the- ... s-he-knew/
"Loss Aversion," for one, crops up when an investor is reluctant to sell a poorly performing investment and redeploy assets into a more promising opportunity.
"Anchoring." This can occur when an investor uses the price paid for a stock, exchange-traded fund or mutual fund as a reference point for decisions.
Patience and discipline are two of the most important factors for long-term investing success.
It is at times when patience and discipline become most important that they can be the most difficult to practice.
Research shows that market downturns of 10% happen about once a year and that the market finished the year with a positive return 75% of the time. Yo
1. Letting Losses Mount
2. Failure to Implement Stop-Loss Orders
3. Not Having a Trading Plan or Sticking to One
4. Averaging Down (or Up) to Redeem a Losing Position
5. Excessive Leverage
6. Trading Too Frequently
7. Following the Herd
8. Shirking Homework
9. Trading Multiple Markets
10. Overconfidence or Hubris
Step No. 1: Identify Your Trading Type - directional or non-directional
Step No. 2: Set Your Price and Time Targets – price and time targets
1. Luck
2. Randomness
3. Patience
Imaging failure, on the other hand, doesn’t feel good. But failing to do a premortem can ruin even well-thought-out strategies for long-term success.
If we anticipate later actions that can undermine our plans, we can improve the likelihood of staying on course.
3 Steps for Controlling Your Emotions
1. Have a plan.
2. Know your time frame.
3. Review the plan.
When an asset consolidates at its highs, it's a bullish sign.
This is a simple but important idea. When an asset isn't going anywhere, traders often get impatient and sell... just before the next move higher. And they miss out on big gains.
The new high shows that folks like the asset enough to pay the highest price in a year to own it. The consolidation shows that more folks are willing to continue paying those same, higher-than-in-the-past prices.
And if they're willing to buy at the highs, they'll likely continue buying as it moves higher.
When an asset holds at or near its highs for an extended period of time, it's a sign that investors and traders are finding value at those elevated prices. Once those levels become the new norm, the door opens to even higher prices.
So if you're holding an asset that's consolidating at its highs, stay long.
Return to Other Investment Instruments & Ideas
Users browsing this forum: No registered users and 13 guests