Skills each investor must develop
Any person is faced with a multitude of facts, definitions and concepts when studying and understanding any professional activity. Its studying reduces dramatically the interest of the person interested. But, even if a person managed to break through the wall of dry data and somehow to sort out the issues of interest, there are many subtleties and incomprehensible situations. They can be sorted out only in the course of a more detailed study.
A novice investor, who is just beginning to explore the world of financial investments, is faced with such a situation often. The investor profession, like many others, needs basic knowledge, in the so called materiel. Without it, nowhere and, as a rule, theorems should be learned just to understand the terminology.
Even if you know all the laws and concepts – this is only the foundation, which must also be learned to use. So, for example, having all the details of a car, a person who does not know the assembly algorithm and mechanic skills will not assemble the car.
The situation is similar with trading on the Forex market. As a rule, this is not enough to earn having only basic skills, capital and desires. More experience is needed, as the most valuable detail in any activity.
It is not so easy to share the experience of many years, but there are several points, skills that will accelerate the growth of the skill.
1.Learn how to determine market demand
The concept of supply and demand is the main engine of the market. The ability to determine the demand for an asset is the main skill of any investor. Determining the demand for a specific asset is currently very difficult or may be almost impossible if there is a flat or increase in multidirectional volatility in the market.
Demand may vary due to a variety of factors, such as news, trend changes, correction, etc. It is also worth noting that demand can simply exhaust itself, eventually causing a slowdown or reversal.
2.Be critical of your actions and be ready for change
The dynamics of financial markets are probably the most difficult to predict and changeable dynamics in the world. As on any asset, be it currency, stock or oil, there is a huge amount of external factors. As a result, all financial instruments are interrelated, which further complicates the analysis.
In such a complex and non-permanent system, the ability to adapt to market conditions is a vital skill. Thus, the use of one strategy for all situations in the market will lead to inevitable losses. Therefore, the investor should develop a critical thinking for all transactions, having a clear plan when changing market sentiments and unforeseen situations.
3.Cold mind and hot heart
Always soberly assess the situation and look for logical reasons for your actions. You should never try to invest on emotions or try to recoup at the last moment, putting everything at stake, this is doomed to failure.
On the other hand, one cannot say that the market is only a pure settlement. In this case, some robots would trade. Not a small part of the market is played out by the crowd psychology. And here the “hot heart” can prompt entry for the transaction. Even such a transaction should be based on significant grounds and reasonable conditions.