Invest to win

Do you want to make money trading in the stock markets?

Whoever is interested in the financial markets will find thousands of offers on the Internet, offering him or her, an easy way to win a lot of money. Just write the magic words “make money” et voila.

This is especially for those without knowledge or experience in the markets, which are in fact 99% of the population. This is the group to whom thousands of aggressive marketing promotions aim to, promising them the Holy Grail. But, like many things in life nowadays, it is full of lies.

This sort of adverts will make us believe that we can achieve guaranteed profits without risk.

Investing to win beginners

The “advantages” of using them, are things like:

  • You can start at any moment.
  • You do not need a lot of money to get rich in the stock market.
  • You do not need a lot of knowledge.
  • You do not need experience.
  • It is a system that has been tested thousands of times with success.

With all those advantages, who is not willing to invest some thousand € in it? After all, the majority of us do not have the time, knowledge or experience to trade the stock markets successfully.

But let me tell you something: trading the financial markets is one of the most difficult businesses in the world. And, not even many “experts” can win in the long-term.

This type of promises and campaigns are common to all the financial assets available out there: stocks, futures, forex, classic options, binary options. These promotions will always come associated to some product or service: a course, signals, forex robot, a subscription to something, et cetera. They are easy to detect. We just need to see that what they usually promise is mathematically a fantasy.

For instance, promising to win 75% of trades. Whoever has some logical abilities will notice that it is a lie.

Whoever who can win 75% of the trades could multiply his account by one thousand in a few months, or even weeks (depending on the frequency).

Whoever that can multiply his account by two thousand in a few months will have millions of $.

What trader with a multi-million $ account and winning constantly is interested in selling courses or signals?

Vendors of hope

Those “traders” are not traders at all, but vendors, vendors of “hope”.

The only way to win 75, or 65, or 80% of times, is to win a lot less than we lose.

It is useless to win $10 if I lose 30.

An experienced speculator knows that nobody can win 80% of times with a win/loss ratio of 1:1.

The only ones than win every day are: market makers, brokers, prop firms, or Goldman Sachs. These people “win” every day. They buy the “bid” and sell the “ask”. You buy the “ask” and sell the “bid”.

Do you understand?

Winning investing

The true way for a trader or investor should be different. First of all, we should never believe the fantasies of unbelievable returns.

A great trader can make a 50% per year, ant that is taking huge risks.

A good investor may hope to get 10%, 15 or maybe 25% per year.

That is what people like Soros, Buffett, Kovner or Marcus did. If you want to win more, you had better try to work as a market maker and build up some sort of company: a binary broker would do fine.

Best of all is that some market makers do not only win by their bid/ask edge, but by selling us all sorts of ridiculous services that even promote their own business.

In many cases, we cannot really blame market makers. A lot of them do not sell fantasies. They offer you their conditions and if you can win, it is OK. If you lose, it is your fault.

In other cases, there are companies or people who offer thins knowing that they are lying and swindling their customers. “Win an 80% of trades”, “This robot makes 500% per year with no risk”, “course that will make you a professional day trader”.

Those who offer that kind of thing are lying because: they are not professional day traders, their robots do not make a 500% per year without risk and they do not win the 80% of their trades.

This kind of people, know very well how human emotions work. They know that people are attracted by what the eyes “see”.

The truth is that a manager who promises a 15% return is something very boring. The get rich quick crowd is not interested in it.

Invest long term boring?

Investing in the stock market successfully in the long-term is very difficult.

One of the best options a guy could do is simply, to invest for the long-term. And, even so, he should be careful since depending on the occasion it could be very dangerous. Not everybody can have 50% drawdowns and not having an anxiety collapse.

People are not either prepared to do frequent trading. They think they are, but the fact is that most of them will find that their balance has diminished after some time of trading. That is why my advice for those who are really interested in doing short term trading, is to do it with money they can afford to lose.

You should “explore” the territory for a considerable time, before you go “all in”. You will learn a lot and, in the case you lose (95% guaranteed you will), the money lost will not be too much.

 

Thanks for reading and sharing.