Why you must not put all your money in stocks?
Are you starting to invest with stocks? Or you want to start trading as a business. Then you should read this blog, save money for a rainy day. It may seem easy but actually everyone fail to take action. This is a important money management lesson, if you are starting to trade or invest, understand the risks involved.
It is always good to stop a ship from sinking than boasting yourself and making new decisions. Survival is the first step, you must be sure to be on the safer side. How can you do this, by not getting hit? Change your plan, if you want best results. I will suggest the important tip to save money for another day, it about how sharp you are to implement this.
Each one of us think in a unique way and what we want is gains end of the day, I suggest a plan which is never risky and would make your trading easy. I give plan to invest 60 percent and trade 40 percent, if you have money, divide it into equal halves. Save one part to your savings account and never look back. The 60/40 model holds well with trading/investing or investing/trading, it depends on your views and how you proceed.
It may seem tough but practice daily. I recommend 60 percent investing and 40 percent trading; you don’t need to trade all days. Some days, you have to take rest. Look out the opportunities; it comes with practice learning about volume, patterns and the news. It’s never going to be a one day activity and keep doing it daily. It’s all about how to see the chart and experience matters. Most traders use only the moving average of the stock and it works all the time. They know to tweak the system and look out the best trades.
Not matter how talented you are in reading the chart, save money for the next day and you can be free from debts. I never recommend investing in stocks with loan; it’s too risky to trade with all your money even if you are 100 percent sure about winning. Loan and stock trading is a double edge sword, I don’t say it can’t be done, but why take the risk, when there are easy choices.
Read the charts and get going