Table of contents:
If the stock market worked the way most people intuitively imagine it to, everyone would be millionaires. But the exact opposite is true. Start to rethink and focus on “real” advantages in the market.
The stock exchange is not a one-way street and consistently successful trading in this one challenge. But why do so many traders fail or what do you have to do to get on the road to success? It can’t really be that difficult, can it?
Challenges are waiting around every corner!
Reality speaks a different language. In fact, there seem to be new challenges waiting around every corner that need to be mastered. But only very few of them succeed in the long term. One reason for this is the wrong idea about what the stock market is or how it works. We are extremely influenced by our normal life to a predictable, not to say safe action-reaction mechanism. Drive at the traffic light at green and you will pass the intersection without an accident with very high certainty. One plus one is two and if you throw an apple vertically into the air, you should step aside for safety’s sake.
Unfortunately, these clear and safe mechanisms do not exist on the stock exchange. Here complexity reigns, to avoid the nasty word “coincidence”. Prices only move because supply and demand meet. But it is impossible to predict when an order will come into the market and how large it will be. Even if market participants follow certain routines (the main argument of chart technique), not every market participant is active every day, old market participants disappear, new ones are added. In a certain way, all this causes similarities in price movements, but often also surprising movements.
One platform for everything – including trading
Related to our normal world, such complexity would lead to some surprises. Imagine you are driving your car along a country road into a right-hand bend, steer accordingly and your car turns left. Crazy, right? But you can also imagine the complexity of the stock market. There are always surprises. This is one of the traits of the stock market par excellence and the best strategy will not change that.
Use real advantages!
Just because there are surprises on the stock exchange and they probably occur more often than most people would like, does not mean of course that there are no structures, no “real” advantages on the markets. Or do you know a market that is only falling? It is precisely such advantages that you should focus on and build your strategy, instead of trying to make the stock market safe with some pseudo-indicators.
Of course we do not know how long prices will fall or how long they will remain in a range. But what is certain is that the behaviour will change at some point. It is precisely this “certainty” that you should take advantage of as a trader. Try to put your trading on a basis that can be called the “natural law” of the stock exchange. Prices do not fall or rise forever. Every range has an end! Volatile phases are always followed by quiet times etc. etc. These “laws” can be exploited without a crystal ball. Only a good risk and money management can work wonders. Even if you cash in a downward trend, which will not last forever, 1000 loss trades. As long as your account remains capable of acting via a good RMM, you can clear all the more in the new bull market. If experience is added over time, the better. However, this still does not change the basic principle of the exchange.
My tips for your success!
I would now like to give you a few concrete tips that can improve your trading because they are based directly or indirectly on the basic principles of the exchange. Not all of these points may seem immediately conclusive to you, but this does not change their effectiveness.
1.trade what you see and not what you think!
Without doubt, stock exchange is speculation. However, many traders abuse this fact to constantly anticipate any movements. Abstain from this and instead trade what you see.
2.become a specialist!
Focus on your advantages in the market, instead of wanting to be in the market all the time and everywhere. You have just missed the mega rally in the DAX? Who cares if you end up reaching your trading goals and being successful, because you only trade when you focus on YOUR advantages.
3.concentrate on one side!
Nowadays anyone can trade long and short at the same time. However, this causes enormous practical problems. It is much easier to think in only one direction, which has many advantages. If you think that you can earn less by doing so, because you leave out many movements, you are wrong. The opposite will be the case.
4.use the power of risk & money management
Control your risks and drawdown by choosing position size and portfolio construction. Both can be the turbo for your portfolio. More profit with the same risk, who wouldn’t want that?
Your own legs!
If you look at it closely, successful stock market trading is not that difficult. But the problem is that the path you have to take is not the one most traders want. Instead of adapting to the market, you try to force your will on it. We try to transfer mechanisms & Co, which work in normal life and lead to success, to the stock market. If that doesn’t work, traders get emotional and end up stumbling over their own legs. But it is up to them to break this circle. No one is saying that this path will be easy and short. Your main goal in this learning phase is to protect your capital and gain experience. The market will never adapt to you in your life, but you have to change. I wish you success and if you don’t want to go this way alone, take a look at my trading training! The Trader Training: Because trading must also be learned ! 16 weeks supervision, video coaching, self-determined learning speed, 4-week trading phase and final test. Take your trading training in your hand now! Subscribe now!