Act 14: If you forget these three things, you can forget about the stock exchange

No one likes to lose money. Indeed, it takes time to master the workings of the stock exchange. So, if you are planning to invest on this market, and have fear of losing, you must honestly review your ambitions. However, when you invest, there are several things that you should know if you don’t want to lose everything…

The important events of the market

Know the event that is going to reverse the trend of a course is similar to the one that already sees through a door ; it knows if the one who is behind is a friend or an enemy. Many factors determine the rise or fall in the price of the shares. For example, there is the media, the opinion of the investors well-known, natural disasters, social and political unrest, risk, supply and demand, and the lack or abundance of alternatives. For example, on December 1, 2017, pending the validation of the tax reform in the United States, the CAC 40 has decreased; on the following Monday, after validation of the reform, our index is experiencing a strong rebound. If I was planning to sign a contract future CAC40, I need to calculate the probability that such an event affects my position.

The combination of all events and relevant information that have been released creates a particular trend (bullish or bearish). No need to say more; hunting for information !

Psychology

This is perhaps the factor that is most interesting. Each individual has his own emotions and his logic. We can analyze a situation according to our own logic but, when it is necessary to act, the emotion takes over. Suppose I decide to buy a car ; I have done my research on the efficiency of the engine, the price and other but, when comes the fateful moment, other issues will arise. For example I’m wondering what the other will think when they see me in such a car. Similarly, when you take investment decisions, given that there is an investor on the other side who is ready to buy what you’re selling or sell what you want to buy, you need to be able to understand his psychology and make a good decision. The stock market is a collection of millions of investors with different points of view, sometimes diametrically opposed. This is because when an investor sells a particular title, someone else must be willing to buy it. Because all these investors can’t be all be right at the same time, the stock market is an adversarial system that it is necessary to try to decipher.

The money management

To survive in the stock market, it is necessary first of all to know and to manage its capital. Your capital is the key determinant of your trading. The more you have, the more the possibility of development is great, the more you can spread the risk, as in business. Your capital must be managed as the capital of a company, every euro is precious. I am sometimes amazed at the carelessness of some. They can take care of the increase in the price of butter, without worrying about the capital they invest. Possible ?

One thing is for certain, with these three criteria in mind you will have more chances to succeed in the stock exchange.