My personal approach to financial market

If you are interested in the financial market like me, the most important step is to self-educate and seek out your own information, independent market research across asset classes. The motivation to get up in the morning and do the homework as a routine, create a mindset of self-determination and strong commitment to the business is a pathway to achieving goal. Having awareness and understanding is very crucial as having independence of thought when entering the financial market. Because investing in yourself is everything in life, it will open a floodgate of opportunities to come.

Understanding how the financial industry works and the functioning of money, its move through the economy is the key. This is very basic knowledge that anyone can get in a world of internet where all information can be accessed at the tip of your finger. One only needs to know how to filter out false information. The best input creates the best output. That's always the case for me in seeking to make profit from the financial market. It starts with the passion and certain goal not blindly do it. Blindly trade in the market can cost you substantial loss financially and negatively affect you emotionally and psychologically in long term. So the golden rule is to avoid engaging in reckless bet behavior which is very typical trade pattern of retail traders.

There are different distribution of return in every asset class of each industry sector.
In my own experience, the mega-cap and large-cap stock have higher probability in reaping trade profit with the right trade structure setup over a certain period of time because they have more liquidity making trade exit possible. Mid-cap and small-cap stock have higher risk, they are vulnerable to price manipulation and subjected to business takeover if the company or business is in trouble. But on a positive side, they have a lot of room to grow unlike mega-cap and large-cap stock, so the profit return can be exponential as higher risk presents higher return on capital.

The emotional factor is very important to pay attention to. It actually is the biggest obstacle to your trade improvement. So learning to eliminate emotion in the market can be very difficult and takes along time but once you remove emotion out of the way, things become more easy and clear. You have more focus on your goal and become realistic in what you’re doing. You cut the loser and expand the winner trade in your portfolio. Remove all distractions and false narrative. I find this to be very efficient to trade the market properly.

A good trade structure requires high quality of trade idea both short and long term. The ability to generate one’s own idea and use risk management to mitigate loss. Knowing your risk adjusted return gives you a peace of mind regardless of market volatility. Volatility is certainly our best friend because it presents opportunity. I always embrace it because volatility and risk creates possibility for trader to make money. There are no risk-free asset, it’s only used in advertisement or marketing scheme as a sale pitch to attract the ill-informed.

Trading is completely different from investing. I myself do not believe in investing in anything outside of our self, we are the only thing in the world to invest in, our mental strength, intellect, awareness, knowledge, experience and wisdom.
But I trade the market that we have because capital has to be allocated properly and optimally for sustainable growth of one's well being. And there is no better way to do it than to manage asset portfolio of short and long term timeframe with certain objective. Things that AI or robot cannot do, we as human can do it better with full conscious awareness. We create input value and make responsible decision is how we contribute our share to the overall functioning economy and society.

Trading to me is an art of expressing our thought and idea, strategic allocating of capital and execute trade in a timely manner. Knowing how to response accordingly and remove negative reaction if anything goes the opposite. Adopting a portfolio of diverse assets which fit the size of your capital in the market, generally 8 to 15 assets or stocks work for me with short and long trade timeframe. I implement short and long trade strategy because it complements each other and to avoid market moves against me unexpectedly or unforeseen event that can cause the market to crash.

Utilize trade option the right way can definitely double your trade position profit. It can also be used to hedge against the downside of your portfolio like having an insurance. But this strategy is much more advanced and need more trade experience. If you don’t have enough experience and you trade option for the sake of trading option alone, it can incur capital destruction, you can get wiped out in short period of time. Because option is a leverage product and derives its value from the underlying asset. The same way people use margin- borrowed money to leverage their trade. All these tools need years of experience and proper self-education, you don’t just use these products because it’s available and because it is advertised to you.

Learning to trade properly can take years and need a lot of patience. Always have self-discipline not to engage in reckless trade activity. Create a consistent trade structure process that can be repeated over time that actually makes you money consistently for as long as you live. Build that independent trade protocol that you can use indefinitely and can scale over time, a room to improve. Treat market trading like a real business that you own, not a gambling casino. Being consistent is the key to every success. Life is a marathon, not a sprint. Enjoy your ride and always be in the present moment where you have all the power to make change and build your world.