What is and how do you actively trade in today’s world?
#investing101 #budgeting #trading #tradeinvesting #money #householdbudget
Active trading consists of buying and selling securities for quick profit based on a short-term movement in price. You hold the position for only a short amount of time and then sell it for a profit. Of course, the first example that comes to mind is day trading, which also tends to employ five or fifteen minute charts. Active trading is very closely related with overconfidence, an emotion that’s actually extremely common among investors. Overconfidence is such a recurring pattern of behavior that Ponzi schemes and scammers thrive on people’s overconfidence to make them believe they are able to do whatever they tell them they can do. In other words, they stroke their egos and they swindle them from their hard-earned money we have the disposition effect. This is a behavioral pattern where investors sell winning positions and also hold on to losing positions, one of the most counterproductive investment strategies. Even defining it sounds like something iffy is going on with it… and many studies report that these investors are also underperformers. That’s because these loss-averse investors sell their high performing investments to recoup their losses on poor performers, which ends up doing the exact opposite. I also want to clear up that if you make any of these or follow these bad habits, that doesn’t mean that you are bad investor. We all make mistakes after all, and as I explained in the beginning, only by understanding them can we work to find solutions and avoid them in the future. By transforming these bad habits into their solution, it’s easier to deal with investing anxiety, self-doubt and internal conflict when push comes to shove. With time, your investments will not only become more rational, but you’ll start seeing less losses and more wins instead of just avoiding losses. You can start off with your first win by taking advantage of an amazing deals on the link in the description with Robinhood and webull, “Pioneers of the Commission-FREE investing, giving you more ways to make your money work Harder.
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