”Top 5 investing strategies….”, ”Make money instantly with these strategies”… you can find such headings all over the internet these days. Investment advisors promise you the only strategy that will make you rich overnight.
I am not saying that they don’t work or they are fake. These strategies might have worked for a specific investor at that time. That doesn’t mean you will have the same results by using these strategies.
The market is extremely volatile. If one strategy has worked perfectly at a specific time, this same strategy might lead to losses a few days later. You can never predict the market.
Therefore, the better way is to have a few of your strategies, which you can use under different market circumstances.
Have a strategy that works for you, your goals, your budget, and your time.
Here is what you can do:
• Implement a strategy that fits your belief about the markets.
• Find a time frame that suits your schedule.
• Don’t move from one strategy to the next just because of another investor’s success with it.
I have noticed that beginner traders are quick in changing strategies after a few losses.
Always remember that there are thousands of factors that can affect the markets.
Don’t throw away your strategy after a few losing positions.
Let’s be realistic no matter how good a strategy is, your results will always be different.
If you take a coin now and toss it 1000 times, chances are you would get close to 50% heads and 50% tails.
However, if you toss it 10 times only, it is unlikely to be 50% heads and 50% tails due to the small sample size.
Believe it or now, we can apply that principle to investing.
You cannot assume that an investment strategy doesn’t work based on a small sample size; test it a minimum of 100 times to find out whether this strategy would work for you.
I am not saying that you should stick to a strategy, which has led to losses in most of your investment but don’t be too quick to judge either.
The financial markets are highly unpredictable and volatile. One day, the stock market could be high up and fall the next day. Don’t judge your strategies based on a few cases. Test, test, and test!