by Naofal Ali

 

We are all investors. Life is our financial place.
We have four resources to invest: time, money, knowledge and energy.
The goal is simple: to multiply every of those assets.

Here’s how I trade.

Step one: Observe. Learn.

“Money is made by sitting, not trading.” — Jesse Livermore

In a stock market as in life, there are many ways to invest. First, it requires learning about the market codes, the stocks’ performances, the phases of the growth cycles, and anything else that could help me guess the future trends. Information and analysis are the keys.

“Being ignorant is not so much a shame, as being unwilling to learn.” — Benjamin Franklin

In everyday life, this means to know and to evaluate available options in any situation, and their implications. It demands to be curious, open-minded. A deep thirst for knowledge coupled with a sharp critical sense. I train my eye and my brain to it every day.

Step two: Set a smart plan. Evaluate the risks. Execute.

“I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell.” — Tom Basso

Here are the questions that help me to prepare my tradings:
– How much can I bet?
– In which stocks will I invest my resources?
– What is the right moment to invest in those stocks?
– How much can I lose?
– How much can I win?
– How much is my stop loss?
– What is the backup trading if things turn bad?
“By failing to prepare, you are preparing to fail.”
― Benjamin Franklin
In everyday life, these are the questions to get prepared.
– What are my capacities? What are my resources?
– What is my goal?
– Who or what is my best chance to reach it?
– What resources will I invest in it or him?
– What are the risks?
– When do I impose myself to stop trying?
– What do I do in case I fail?

Step 3: Keep focus. Cut the losses.

“The elements of good trading are (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.” — Ed Seykota

Always keep an eye on the stock curves. If they don’t fit your forecasts, carefully calculate your moves. Protect your gains at any price. There is a time to focus on what you can win, and another to focus on what you could loose.

“Do not spoil what you have by desiring what you have not; remember that what you now have been once among the things you only hoped for.” ― Epicurus

In everyday life, it’s a reminder to measure ambition. Being bold and progressist are for sure noble qualities, but so is wisdom. Chasse your dreams, but overall cherish your blessings.

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Op–ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija

Naofal Ali is a product manager, who loves FMCG’s Marketing, Design, Entrepreneurship, Africa, and People. He blogs at medium.com