As all things in life function, investing too begins in your head. A lot of people enter the stock market upon hearing hot tips, news, hunches and gossip. People are further motivated when they meet someone who happened to have made big money. Jumping into the share market doesn’t guarantee a big splash. For many investors or traders, if their expectations are not met in a few tries, they leave the market, joining the 90% of people who do not succeed in the stock market.
To be a part of the exceptional 10%, you must master the right psychology and beliefs to manage, the excitement, greed, fear, denial and the great plethora of emotions that develop as you begin your investing journey. Besides that, you also need to get a plan and stick to it. This plan should be designed to meet your financial objectives. The methodology used to achieve these objectives should be suited to your time and personality. Having a plan can help you to stay disciplined and prevent you from using your emotions or intuition to justify any decision made while investing or trading. A trading plan must consist of actions that can be repeated regularly – and that becomes a repeatable “system”.
For example, the system we advocate to our students comprise of the 4 steps:
S~ Selecting the right stocks
T~ Time for entry and exit
P~ Protecting your investment
M~ Multiply you returns safely
We hope those of you who are hoping to venture into stock market investing & trading will not ignore the significance of mastering the psychology behind investing. Get it right in your mind it’ll turn out alright in reality.