How to Get in the Game and Profit

Email

A few weeks ago, I told you a story about a woman who took my advice and used it to overcome her fear of investing.

As it turns out, it was an incredibly popular column.

Reader Robert from Vancouver wrote:

Thanks Shah for trying to provide some financial education.

There is a real and urgent need to teach people at least the basics of investing, the economy, and business.

And I wholeheartedly agree.

That's why I wanted to come back and build on the advice I originally gave you.

You see, once you make a decision to start investing, the next step is to make a commitment to become successful.

And today I'm going to show you how to make that next step…

To Be Successful, You Have to Put on Trades

In a nutshell, the advice I gave in my March 27 column was:

Start by taking positions in companies you know something about. It doesn't matter if you like or hate it. Just that you know enough about the company's products, services, whatever they do, so the stock's ups and downs make sense to you.

Once you pick a stock, you always start the same way. You put on the trade.

Never think that your trade, or your position, is an investment. It isn't. It is a trade.

You can get out of it at any time.

If it turns into a brilliant pick, your trade will turn into an "investment" because it's worth holding onto.

But to become a successful investor you have to start by putting on trades.

You can't make money watching from the sidelines. But you also can't be a deer in the headlights either. You can't go into a trade and think it's an investment and you're stuck with it when it goes against you. It's a trade!

And the reality is that some of your trades will be losers…

That means you will get out of positions with small losses. It's part of the game. You will have some losses but they will be monumentally overwhelmed by the trades that will make great money. And the ones that keep going up and maybe pay you dividends will become the "core" of your investment portfolio.

And that's your ultimate goal. You want to create an investment plan that leads to financial freedom.

Psychology and Perception Are More Important Than Data and Facts

One of the reasons I say that you don't need to be an expert on any company, or on any stock, is that no matter how much homework you do, no matter how much analysis you do, what makes perfect sense on paper may have nothing to do with how your stock trades.

When you watch your stock going up and down, you begin to understand the "psychology" of other investors – what they're looking at, how they interpret news and data.

You're one person with one position. There are millions of people like you watching that same stock. Collectively, their perception of news and data and the psychology of their fear and greed ultimately motivate them to take action, which moves the stock.

I can't tell you how many times I've done copious amounts of research and been absolutely confident that I was putting on a winning trade, only to have my head handed to me because other traders' perception of something that came along (it could be out of nowhere) was interpreted as a reason to sell the stock.

My saying – and I live by this – is:

Join the conversation. Click here to jump to comments…

About the Author

Shah Gilani is the Event Trading Specialist for Money Map Press. He provides specific trading recommendations in Capital Wave Forecast, where he predicts gigantic "waves" of money forming and shows you how to play them for the biggest gains. In Short-Side Fortunes, Shah shows the "little guy" how to make massive size gains – sometimes in a single day – by flipping large asset classes like stocks, bonds, commodities, ETFs and more. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

Read full bio

  1. mosso09914 | April 23, 2014

    This is a great article, if it weren't for the mega computers out thinking you in milliseconds.
    The only thing that saves the little guys are people like you and the MoneyMapGroup.

Leave a Reply

Your email address will not be published. Required fields are marked *


3 × = six

Some HTML is OK

© 2014 Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201, Email: customerservice@MoneyMorning.com