This is the beginning of our stock market educational journey. I am fully committed to providing as much quality content as possible, at least I hope so, aiming to share the small amount of stock market knowledge I have acquired through good and bad experiences in the markets.
A little about my investing/trading approach. I am an amateur position trader mostly trading and investing in the US stock market.
I aim to catch strong growth stocks and ride them from a few months to possibly some years. I look for those beasts that change the way we live, work, and play. Such stocks will typically have very strong earnings & sales growth and very high future growth estimates, in some cases 100%+ for several years. Once I am in, I try to sit through 6-8 strong earnings reports as, historically, this is when the largest moves occur.
Sometimes I do swing trading in which I hold stocks for a few days to a few weeks depending on the market conditions and if my thesis is incorrect.
The deciding factor in my trading/investing style is the market direction (uptrend vs downtrend) as 3 out of 4 stocks will follow the direction of the market.
During an uptrend (in bull markets), this is where you have the highest probability of succeeding as you typically would have the wind in your back to help push your stocks higher.
In a downtrend (bear markets, like 2022 and most of 2021) you want to work on preserving your monetary and mental capital. The odds are typically against you, and you would be a lot better staying out of the market while keeping your finger on the market pulse for a possible change. Here is where your training and market timing techniques come to play.
Enough about me. Let’s focus on education. Why do I care so much about education when it comes to the stock market?
Let me run you quickly through some real-life examples.
Would you ever trust a doctor with little to no education and practice time to perform open-heart surgery on you or even prescribe a simple medicine?
Would you be ok with an uneducated/untrained engineer designing your house and performing the proper structural calculations?
Most probably your answer is HELL NO. Do you know why? Because 99% of such uneducated individuals will fail to perform surgery or design a robust building. I guess now you can conclude why 90% of investors and traders lose money. Simple, because they lack proper education.
You spend 4-7 years (and tuition) in college to learn about a specific profession. Then, you graduate and spend the first few years of your career training to become the best version of your profession. Why would you expect any difference in investing/trading? You need to obtain the proper knowledge and acquire the right experience before you become a successful one. Believe me, it is 100% doable if you dedicate the time and have the right mindset and commitment.
The stock market is the best wealth-building machine ever built. It can change your life forever, however, it is not for those that recklessly jump in “hoping” to float instead of sinking. Before you learn how to float and become a good swimmer, you must learn how to swim.
It is shocking how many are willing to invest (or gamble) their hard-earned money in the markets based on personal opinions/feelings, others’ recommendations, and/or tips without knowing a thing about the markets.
Most of those end up losing their money while blaming it on the market. Thinking that the market is rigged against them. In fact, it is not. The market treats us all the same. The difference is, how well equipped are you? By equipped I mean how much effort have you put into learning about the stock market, discipline, and risk management. Have you prepared yourself, did you do your homework, and most importantly, are you committed to mastering your own emotions?
If the answer is yes to all the above, stick with me, we might be on to something here.
In the upcoming articles, I will be covering the following topics and some more.
Market Cycles and examples of previous winners.
Risk Management & Avoiding bad markets while participating in the good ones.
Position Sizing and portfolio management.
Name Selections and scanning.
Proper buying and selling techniques (1 of 2) Buying and selling points.
Proper buying and selling techniques (2 of 2) Chart patterns.
Putting it all together.
Disclaimer: I am not a certified financial advisor and all the content I provide on this website is for educational purposes only. Know your timeframe and personality. Then, invest and trade at your own risk.
* This was not written by Thndr and does not constitute investment advice, you should do your own research before making investment decisions.