Archives September 2020

Stock 101: Diversify Your Stock Portfolio

Any for stock 101 guide will tell you that diversifying your stock investing portfolio is a very important step for you to be a successful investor. Everybody knows why they invest in the stock market, to grow money. However, this notion is only 50% of being a good investor. The other part is controlling risks that the stock market brings that can take away your money. And many, whether they are beginner stock investors or not, don?t have the right stock knowledge to properly follow this rule.

If you?re reading this article, you probably have some experience with the stock market. And if you do have any experience what-so-ever, whether you?re a beginner stock investor or not, you know that diversifying your portfolio is a rule that should be followed. Every investing guide teaches us this common stock knowledge and continuously imprints the importance of it in our heads. Its stock 101 because it?s one of the first things you learn to be a good stock market investor. Yet so many investors don?t realize the importance of stock diversification.

Sector risk is the largest and most hazardous risk in the stock market. It?s stock 101 to know that the stock market is always impacted by sector risk. If you?re a beginner stock investor and don?t know what sector risk is, I?ll attempt to explain it here to give you this important stock knowledge. Each sector moves independently from each other. Therefore, when one sector is up, another is down. Therefore, if you?re able to control this risk, you?ve taken a huge step in being a successful beginner stock investor.

With so many different investing strategies out there, diversification is the only real stock 101 idea that works for all investors. It doesn?t matter if you?re a beginner stock investor or an experienced hedge fund investor, diversification is a must. Many investors don?t have the stock knowledge to realize the many different declines we have in the market. Each sector goes through at least one drop per year so if you were to buy two stocks in the same sector, you would get a double hit during the year. Why take this beating? Do what stock 101 guides tell us, diversify your portfolio and you won?t get affected by these big downfalls in the market.

It?s funny. Like I said above, diversification is stock 101. However, I continuously see investors put together portfolios that aren?t close. They think they are but owning two healthcares or two tech stocks in the same portfolio is definitely not being diversified. If you think diversification is an easy stock knowledge concept to understand, you?re wrong. And I know because I keep on seeing improper diversification time and time again.

Usually, the problem is that they don?t have the right stock knowledge to determine what industries fall in what sectors which results in them buying stocks in the same sector. And this mistake just doesn?t happen to beginner stock investors, you wouldn?t believe the amount of times I?ve seen improper diversification from investors that have been investing in the market for decades. Even though diversifying your portfolio seems like stock 101, it can be difficult to fully diversify properly so learn the stock knowledge to proper diversification.

If you found this stock 101 rule helpful and wish to learn more about beginner stock investing, please visit my website. You?ll find valuable stock knowledge on my website including stock investing advice, rules and tips that I?ve learned from my 20 years investing in the market. Click here for a stock 101 guide.

Golden rules of money management that you must learn

Everyone thinks money management is not necessary. To them taking the trades in the future market is more like testing the luck. But this is not all true. If you want to sustain in the investment arena, you must learn the role of money management. Money management is the most important factor that allow you to take trades with low risk. When you take the trades in an organized way, you learn to trade with low risk. This gives you the unique opportunity to lose more trade and it eventually boosts up the profit. As a naïve trader in Singapore, you might not know the golden rules of money management. Even if you know, you should read this article as it will weld your knowledge. Let’s see the golden rules of money management.

Trade with a 1% risk

The 1% rule of money management is one of the most famous rules for rookies. People who are trading for a long period, always encourage trade with a 1% risk. Those who have big capital often risk less than 1% of their account balance. The reason to choose 1% of the account balance is to ensure the safety of the capital. You can easily lose trade without thinking about the potential outcome. When you take the trades in a conservative manner, you get the chance to overcome the obstacles. It allows you to improve your skills and eventually it boost up the profit potential.

Chose a great broker

To protect the capital, you must trade with a great broker. The reason to choose a great broker is the safety of the fund. Check here and you will notice that Saxo is well advanced and regulated to offer financial service. When you chose Saxo as your main broker, you get the unique chance to improve your skills with the help of their advanced tools. Most importantly, you don’t have to worry about the quality of the trading platform. With the help of SaxoTraderPro, you can take high-quality trades most of the time. People who take the trade with the unregulated broker always lose money as they don’t know how to deal with the advanced tools. So, find a great broker who offers premium service.

Trade with the major trend

Trading with the major trend is by far the most efficient method of trading. People who are taking the trades for long period knows the importance of trend trading strategy. As you learn the method of trend trading strategy, you will slowly develop the skills to manage the winning trades. Most of the time, the rookies are losing money as they are betting against the major trend. You can’t survive by taking decisions against this vast market. Future trading is very hard but if you favor the trend, it will be an easy task. So, learn to find the trend in the future market so that you don’t have to struggle.

Develop your skills

Developing your trading skills is a part of the money management policy. You have to improve your skills on a daily basis. Find the losing orders and try to fix the faults. By fixing the faults, you are actually improving your trading strategy. Keep on doing this and this should give you the ultimate freedom to take the trades in the professional environment. Within a few months, you will get the perfect trading and edge. When you have a well-balanced trading strategy, it won’t be hard to find the potential trade setup. So, focus on your skills.

Conclusion

Becoming the best trader in the future market is just a matter of time. Follow the tips of this article and you should find a great level of ease in your trading profession. When you feel emotional take a small break. But never take any decision with biased analysis. Trade what you see in the chart.