95% of the people who open a trading account and buy stocks/crypto end up losing everything.
The main contributing factors for this are:
1. Margin trading, borrowing money, futures, options, cfd: If you don’t own it, be prepared to lose it. (Margin call) People fall into the trap of thinking, especially at the beginning, that they don’t have enough money to be a successful investor or that they have to get it as fast as possible.
“Even if your borrowings are small and your positions aren’t immediately threatened by the plunging market, your mind may well become rattled by scary headlines and breathless commentary. And an unsettled mind will not make good decisions.” — Warren Buffett
2. Diversification: If one asset makes up more than 50% of your portfolio, then you should better be prepared to lose 50% of what you own! The best thing is to have at least 5 different assets all with a minimum 10% weight in your portfolio in different sectors (stocks, metals like gold/silver, crypto).
“If you get too close to the sun, you will burn, if you get too far, you will freeze.” Don’t go all in into something, but if you have hundreds of different assets you likely only get small gains overall.
Anything can go bankrupt. You can build a house and the company goes bankrupt, you end up with an unfinished house that you can’t live in and nobody pays your money back, this happens all the time. It’s always a wiser choice to buy something that is finished, than expecting someone else to finish it for you.
If something sounds too good to be true, be careful!
Always ask questions like why? Do you have an example and does it make sense to do this here?
https://www.investopedia.com/terms/d/diversification.asp
3. Never listen to any news or trust someone blindly (People want to buy cheap, so they will tell you to sell), always do your own research! Never make any impulsive decisions! The fastest way to lose a lot of money is listening to the majority because 95% of the people who open a trading account and buy stocks/crypto end up losing everything. (Fear, uncertainty, and doubt, https://en.wikipedia.org/wiki/Fear,_uncertainty,_and_doubt)
This post was inspired by the mistakes of Jesse Livermore. Learn from the mistakes of Jesse Livermore and don’t repeat them. Risk management is very important! (Book: Reminiscences of a Stock Operator)
https://en.wikipedia.org/wiki/Jesse_Livermore
Don’t listen to marketing gurus who promise you everything, even if they’re wearing a suit and look smart. Imagine everyone as a clown who wants to make as much noise and money as possible.
Always do your own research on a company/crypto before investing your hard-earned money in it. Be a diversified long-term investor who can keep their assets during bear markets and doesn’t have to sell during bad times in life, start early.
The only thing that has existed for 10'000 years and has a value is gold/silver!
