I never used to be all that interested in finance. I was good at saving my pocket money and later my earnings, but never really thought about what to do with the cash. My mum dealt with such matters and that suited me just fine.
Over the years, I started wondering, though, what that stock market thing was all about, but never took any action … until December 2016. That’s when I began my home edcuation by reading up ‘what is a stock’. Yes, seriously, that basic! Then I subscribed to Investopedia‘s free newsletter, which has delivered educational snippets right into my inbox ever since.
I have learnt that there are loads of things you can trade – stocks, various forms of derivates, currencies, …
Initially, I tried binary options because you can start with a miniscule account. It sounded easy and, if I remember right, tax-free. As it turned out, it wasn’t all that simple. I’ll write about that experience in another post.
After a bit more research online, I settled for stock trading. The concept is easy to grasp – buy and sell to make a profit. I rushed into it without much of a clue and the predictable happened. Another story for later.
So, it was time for reflection. Instinctively, I knew that I wanted to become a long-biased trader, i.e. buy low and sell high (as opposed to a strategy that shorts stocks, i.e. sell borrowed stock high and buy back low). I have never liked the thought of having debt. It took me years to bring myself to take out a mortgage. So, dealing with borrowed stocks just doesn’t sit quite right with me, at least not as a beginner strategy.
After a short period of developing and testing a simple trading strategy, I have now started applying this system in the real market. Experienced traders say that you shouldn’t really be nervous about your trades if you trust your system. Well, I suppose I don’t trust my system yet… Should I have taken it to the markets now or rather tested for longer? Am I rushing things again? – I shall see.
I needed my first naive and stupid rush to calm myself about the whole thing. I had to feel the pain to wise up. I knew this as I went into it. Crazy, eh? I like to think that this second phase is more of a grown-up move.