Many times, i've heard of people saying they play big in the stock market. In Singapore, the brokerages allow people to play on contra which is like buying stocks on credit even when you do not have that sum of money. If you sell within 3 days, then you will not have to pay the full cost of owning the stock. However, the risk is if the stock drops, you still have to sell within 3 days since you do not have the money to pay for owning the stock. I've noticed an increasing number of young people buying stocks on contra hoping to make a killing in the stock market in a very quick time. To me, this is just a huge risk and one mistake can cause them to be wiped out. It doesn't matter how much they make now. The truth is if anyone plays like that, then one day he will be wiped out.
Trading and investing is about playing it defensive. One thing i learnt is before entering the trade, find excuses not to trade. When you're in the trade, find excuses to get out of the trade. With this defensive mindset, a person can survive in the stock market in the longest time without getting burnt. To win the race, one must be able to stay in the race. If you get burnt and don't dare to enter the market any more, then you've officially lost the race without completing. Professional traders typically take 3-5years of hard work before they are able to be consistently profitable. The dream of making huge money in a very short time is but just a dream. In reality, it is not possible. Even if someone has made a lot in a stock market rally in a short time, he or she will eventually lose it all. This happens most of the time. There's this thing about beginner's luck where a person who has just started trading will make profits first. Eventually, he will lose it all and even more. Its like the stock market is luring new preys to fall into the trap.
So, always remember, its not about making big profits in a short time. Make consistent profits every month. Those who are patient and put in hard work will eventually make it. Professionals who became successful make profits ranging from 20k-40k per month. These people who made it also start with a few hundred dollars per month. Never despise the days of small beginnings. If you're not making much in the stock market now, please do not give up. It is a skill that will be useful and will serve you well in the future. Always research, learn from successful people, think defensive and have good financial management to reduce risk. Know what you're doing before you enter the market. Always follow your plan. If you fail to plan, you plan to fail.
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