It doesn’t matter if you are a trader who get big profits in the high degree which, with the help of handelsgurus double their accounts year after year, and use automatic handelsrobotar that can give you a fortune while you enjoy your life without being tied up in front of the computer all day. But can misleading ads, empty promises, and an unlimited potential profit help you trade more risky and create the right sinnestämningen? We came across two interesting studies that analyse the mäklaruppgifter and trading behavior of retailers. The results were surprisingly clear. We will highlight three of the most important
1. Traders who have more money or bigger trading accounts tend to trade less. A possible explanation for the effect is that trade with a small trading account means that your potential profits are much smaller. Therefore, we need to take more positions in order to get a meaningful profit. In addition, people with less money usually worse on that play because they have a desire to earn a lot of money in the hope to escape from their current circumstances, i.e. they trade more with the hope to earn money faster.
Lesson: Handelskontots size has a great influence on your trading behavior. Traders with smaller trading accounts are more likely to end up in over-trading.
2. First of all: the lottery-shares offer larger potential profits due to higher volatility, which means that the potential losses are potentially higher. The authors use the term lottery to describe the fact that investors and traders are willing to risk and lose more money to get a potentially higher profit.
Even if the investors are willing to take bigger risk to get bigger profit, they can not achieve their goals and end up losing more money than traders that invest in more conservative and stable stocks. Other studies suggest that traders hold on to losing more than winning. Greater volatility and higher potential ”drawdowns” are a dangerous combination; Traders who are willing to accept greater losses, lose everything.
Lesson: the Higher volatility makes it possible for traders to perform more. If a trader can not cut lost business, he should not trade volatile instruments. A trading plan, trading strategy, and mental strength is a must to avoid any handelsmisstag.
3. Beginners who live in urban areas and belong to specific minority groups invest more in stocks with the lotterityper. Investors with large difference between existing economic conditions and their ambitions contains the risky shares in their portfolios.
Why do we lose money? It is very important to understand their objectives; Trade is often seen as a ”way out” and a ”get rich quick” scheme. It is also important to note that traders who want more money and not have the income they need, are willing to risk more.
Lesson: Check your trade goals. You’re trading a single goal? If money is your only goal and you want it quickly, then trade a wrong employment for you.
Conclusion: What is your goal in trading?
The three main messages in the article, supported by scientific research, is the following:
1) Smaller trading accounts or small savings leads to over-trading
A small trading account means that your winning trades will be small and meaningless. The relationship between account size and over-trading is therefore significant.
2) Trading with big volatilitetslager leads to underprestanda
People who trade stocks with high volatility tend to get a quick rich mentality. Research clearly shows that a combination of high volatility and a gambling attitude leads to significant under-performing.
3) If you need money, don’t trade.
Traders who need money and are not satisfied with their current situation, leaning more towards a spelmentalitet and lose more money than other traders.
Before you take any more business, you should evaluate your goals. Why is you, what you want to achieve? The results from the researchers are clear: trading with the wrong goals and line of thinking leads to underprestanda.