Link to the first post https://getqu.in/cbIOkg/
I will also link all parts in the first post and pin the first post in my profile.
This part of the post is about the following 2 topics
- Trading versus Buy&Hold
- What are the requirements for trading
To Buy&Hold I don't need to explain much more here 😉 It's a well-known and proven method, particularly suitable for more passive investors or those who don't want to deal with the stock market on an ongoing basis. Start with a savings plan - "time in the market" pays off!
When trading the situation is somewhat different. Active trading is required here. "Timing the market" is the motto. With the appropriate knowledge, a careful approach, good risk management and, above all, discipline, it is far more than just "gambling" or "gambling".
When I analyze my losing trades, the cause is almost always a lack of discipline, such as impatience or poor risk management. Sounds simple, but it's not... "The spirit was willing, the flesh was weak" 🤪🤷♂️
Conclusion:
- B&H and trading are not mutually exclusive, but can be combined well and sensibly. Part of my trading income, for example, flows into my B&H share on an ongoing basis.
- Trading means being responsible inform - plan trade - execute trade!
- Without a genuine interest in active trading and having fun trading, this will not work. If you just follow tips or influencers, you will almost certainly end up with the ominous 80% who only lose money (if only because the timing is no longer right).
The last two points in the conclusion are a good transition to the topic "Prerequisites for trading". In my view, in addition to the points already mentioned, the following aspects are essential in order to be sustainably profitable:
- Money management
- A trading tool
- Knowledge of chart analysis "a fool with a tool is still a fool"
- Discipline
Money management:
On the subject of money management, I would like to refer you to one of my older posts. It is essentially about determining the capital investment and the position size based on the maximum acceptable loss.
A proven guideline in trading is: Never risk more than 0.5% to max. 1% of your available capital per trade. You can find details on this in the following post https://getqu.in/tzhXqc/
Trading Tool:
Since trading is all about "timing the market", there is no getting around a trading tool. There are several tools on the market, and almost all of them offer a free version to get you started. The free versions are usually not sufficient for professional trading, as important indicators and data are missing. However, they are perfectly adequate for starting out and testing a little.
Tip: Use the free trial months of the subscription models to decide for yourself whether and which paid subscriptions are of interest to you.
I use TradingView https://www.tradingview.com and I'm really happy with it. In addition to the chart tool, there are lots of functions such as share screeners, market information, watchlists, price alerts, calendars for events such as earnings and dividends and a news feed. There is also a community, but I haven't used it yet.
Tip for beginners: TradingView also offers a demo account (paper trading), where you can safely start trading and test your strategies without using real money. Paper Trading — main functionality — TradingView
If you are interested in TradingView, I can offer you a referral link (just ask for it in the comments - I don't want to actively post the link here). Then we both get 15$ credited to our fees. PS: I am not a Finfluencer and have nothing else to do with TradingView. It is not a source of income nor the goal of these posts - it would just be the usual friend-referral.
Knowledge of chart analysis:
Well, as written above, "a fool with a tool is still a fool". Of course, you can't do it without learning and dealing with the subject. The trading tools are all very helpful, but without understanding what you are doing with them and how to use the charts, indicators or oscillators, it won't work. Fortunately, today there are lots of tutorials on YouTube, communities etc. where you can acquire knowledge free of charge.
There will be more on chart analysis in the last part of the articles when it comes to my trading setup.
Discipline:
This last point is the most important; in combination with the 3 previous points, discipline is the key to success. Even long-time traders are subject to FOMO with accompanying ill-considered or not properly analyzed trades. This often ends the way it must... "Know yourself and your trading behavior!"
Please note, this article only reflects my experience. There are many different approaches to trading - there is no right or wrong. In the end, everyone has to find a setup that suits them.
Actually, I wanted to cover the first three points today, but as this post is already quite long, I'd rather end it in the spirit of TL:TR and will cover the points "Time spent" and "Trade frequency" in the next post. Possibly also "Profit and loss trades YTD 2025", which would fit in with the trade frequency / number of trades.
PS: as I'm traveling for work for the rest of the week, there won't be any more parts until next week.
In the feed of the linked shares you will find posts of the last few days/weeks from me $UBER (+7,7%)
$ADYEN (+4,62%)
$MMK (+1,5%)
$VRTX (+4,56%)
$RDC (+1,68%)
$KTN (+0,91%)
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$MRK (+6,95%)
