Hey Tackle Traders,
Over the last two months or so I’ve been seeing more and more ads or posts regarding stock trading than I ever have on a lot of platforms online. People in my circle that aren’t traders also have been reaching out with an interest in learning how to invest and I’m sure if your friends and family know that you are a trader as well, you’ve been getting the same type of calls and texts. So what are you telling them? I find myself excited that people are showing interest in wanting to learn how to invest for themselves so naturally I’m eager to start the conversation to get them going and share what I know albeit tiny in the grand scheme of things considering the many layers there are when it comes to investing. No matter the level of experience the individual has when it comes to learning how to invest, the message is still the same for them as it was for me and will continue to be so until the end of time.
I was thinking about what the first thing of primary importance would be when it comes to investing to share with friends, family, and anyone new that might be reading this or serve as a reminder for you veterans out there. It all comes down on to one thing, principals. Like in everything else we do in life, we have principals or guidelines that we apply every day. Be it religious, health, or wellness related, there is a process in which we aim to follow to achieve success. We don’t always hit the mark on all of them but the goal is to make an effort. Across these different areas of life, the keywords you’ll hear are no different when it comes to investing. These principals are there to guide and protect you as you navigate through life. They are the core principals to apply to have a chance at becoming a lifetime investor and not a part-time whenever I feel like it kind or the tried it and it didn’t work out for me investor. To be an investor you must be able to embrace all investing comes with. The good, the bad, the ugly, and sometimes bloody, taken to the woodshed moments that occur as we saw earlier this year.
Education, education, education. Yes the lingo sounds foreign and it can feel overwhelming to the point you want feel like quitting before you’ve even gotten started but it is part of the process so just embrace it. In addition to learning the trading and investing verbiage, you need to know how to your broker software that you plan on using. There are tons of videos and courses available here to help you build a solid foundation in investing.
After you’ve gotten past the terminology now comes understanding. This is where the phase of putting the pieces together starts. It’s one thing to know the definition of a long call. It’s another when you understand that a long call is a directional trade that you execute when you have a strong bullish bias on a stock. It’s when you recognize a cup and handle patterns on a chart and understanding what that means. Having the awareness to choose one strategy over another when determining how to deploy your capital and minimize risk. Getting to the place where you grasp something no matter how big or small gives you that boost and eagerness to want to know more.
This is the area that most traders and investors struggle with. Following and sticking to the rules.
It’s one thing to know the speed limit on a highway and it’s another to obey the speed limit. Having a blueprint to the type of trader or investor you are going to be is one of if not the most important piece to the puzzle yet we spend the least amount of time in this area. Yes, everyone knows that every trade must have a stop loss but what is YOUR stop-loss rule, and do you obey it every single time. Design a blueprint that best works for you and your trading style.
Have a top-down approach to how you plan on running your trading business.
- Account Types: Are you going to have 2 separate accounts? One for trading and the other for investing such as a margin or IRA account.
- Capital Allocation: How much capital are you going to allocate to trading vs investing?
- Positions to hold: ETF’s or equities or both? What percent?
- Core Strategies: How many strategies do you plan on using?
- Entry Rules/Exit Rules: Which key patterns, signals, or indicators will you use?
- Risk Management: Portfolio management, profit-taking, and stop-loss rules and hedging technics
You have to click the button! Like or not, we all have to face this phase sooner or later to even have a chance at becoming a successful trader or investor. It’s the one principal most people either anticipate or fear. Some want to get to this part as soon as possible and bypass the other principals while others will embrace the other principals with great confidence and freeze in fear of making their first trade. Whichever approach you take into entering the market is yours to decide and this is where everything you’ve learned, designed, paper traded is put to the test. What you think will happen vs what the market does will be a never-ending battle and letting your emotions drive your decision making is a sure way to end to your journey fast. When trading, wear your trading hat and trade what you see. When investing wear that hat and dig into economic cycles and fundamentals of growth and value stocks.
Having a platform to go and get help, praise, or encouragement along the way is awesome. I love seeing how team tackle celebrates successful trades with one another and give support for those not so successful trades. We bounce ideas off each other, we learn from each other, sometimes we just need to speak to another human other than ourselves over a chart we’ve been starring at for hours trying to decide what to do. Not to mention that it is easy to isolate yourself from others when you are a trader so its nice to come out and interact with others from time to time.
And with that said, tonight at 8:30 pm est is our Women In Trading webinar so I look forward to seeing the love ladies of team tackle there!
Until next time Traders!
Emily Muiruri was born and raised in Nairobi, Kenya before her family moved to the US and settled in Maryland, Emily began her trading journey in January 2015 after 17 years of Property Management in the Self-Storage Industry. Like many new traders, Emily started off with directional trading strategies such as long calls, long puts and very little in cash flow strategies. Over time that has changed and now her core trading strategies are cash flow based such as are Covered Calls, Naked Puts, and Iron Condors. Though she is still a student learning and enhancing her trading skills, she has a strong desire to teach women to take control of their finances and become traders. Writing blogs is one of the ways she’s is looking to spread the word and get more women involved. Emily knows that with the right education and trading system women can be successful traders.
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