Don’t be a sheep, be independent of thought and deed when trading. This is a fundamental requirement if you want to be a successful trader and be the profit taker. For most people this is not an easy route to go as whilst we all know a true rebel who is prepared to buck the system it is uncomfortable for most of us to consider doing.
However the ultra conformist who is so fixated with rules that they are unable to think independently can also seem quite restrictive and certain when trading will mean never being able to fully profit. So it is essential to find the area where you can feel comfortable while going your own way enough to potentially cash in on market movements that go against others and in your favour.
Going it alone is an uncomfortable place to put yourself as the evolution of man has been in part due to the premise of ‘safety in numbers’ and through the knowledge that working together brings more success than operating as individual islands.
Does this mean that you have to be a non-conformist to cope with trading then? Well not necessarily as it simply means that you need to have the capacity to look outside of the standard thinking and consider more options than the majority.
If you have self-confidence and your own identify then this isn’t too difficult as you are not going to be going too far outside the pack, you just need to be able to formulate your own opinions of what will occur in the market and to develop a strategy that can work.
So to be successful you are basically working out what the market may do based on expert opinions and your own intuition. Then you work out what the majority action will be to such an event and take a position that will benefit. This doesn’t mean always going against the crowd but working out when to step away from them.
For example, when establishing a long-term position for investing, the best stocks are those that will remain relatively stable with increases built up over time. To establish a stock in a long term investment strategy requires the crowd to believe that it is a good investment for the long term.
Therefore you go with the crowd and establish your cornerstone investments. However, there is always a point where a stock or a market turns and the successful trader is the one who anticipates the shift and benefits from it by turning a profit or not losing as much as the majority.
Many say that to get ahead of the curve and have enough intuition to anticipate all the shifts and changes of the markets is impossible. The best you can hope for is to ensure your exposure isn’t too great.
Whether using technical indicators or following news stories or research insights, the fact is that you have to follow your identified strategy and be almost arrogant in your belief that it is the correct one. You have to feel confident enough to commit your capital and take the risks, though with risk management applied. However you have to ready for that moment when you turn it all around and go the opposite direction or have stepped out of the known route and taken a new strategy.
In the current markets the expectations should be realistic as to how much profit making there is to be had. As the market shifts every few weeks and poor results in classically solid long term investment options play off versus unexpected surges from some sectors, only the truly experienced and independent trader is going to be in a position to make the large profits of a bull market.
However, if you beat your own path between conservatism and independent strategy, the opportunities are more likely to present themselves and you are in a better position to make profits.
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