Tuesday 16 February 2010

3 Ms of Investing or Trading – Mind, Method and Money

To be a successful active investor or trader, you have to find your 3Ms of Investing or Trading - Mind, Method and Money.

Mind

You have to learn and discover your own emotion weakness in the volatile market and find ways to check your own emotions. This is the hardest to do but you must find your own ways to live with the daily price volatility of the market and learn to see the market in two views: half empty and half full.
 
 
Method
 
For trading do you have your own trading system or following a commercially available trading system?

For active investing, do you have your own investing strategies or methodology?

Track your performance closely. Revise or discard if it is not working according to your expected goals. Sometime, it is just pure luck when you happen to get it right. Does 3 strikes make a good bowler?
 
Money
 
What is the your money management and risk control so that you don't lose too much of your capital and then game over. It is very difficult to recover your losses if your remaining capital becomes too small to have any significant impact.

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