Three things that we have to manage very well in the markets

Nowadays, it is very common for us to make investments in the financial markets and even cryptographic markets. Being successful in the market has always involved a task of a certain level of complexity. But today it can be even more complex than before.

Image Source

What can help us succeed in the markets?

Well, success is understood as making money from the investments we make and minimizing losses as much as possible respectively. Thus, success in the markets derives from a combination of various factors. Among them, knowledge, experience, prudence, privileged information and, why not say it?, a certain dose of faith, are among the most important.

As investors in the markets we must know about technical analysis. Which is the analysis of assets based on the price action on the graphs using statistical and financial indicators. But we must also know how to do fundamental analysis. Which is nothing more than understanding the implications of important news on the price of the asset that interests us.

Both types of analysis have a certain level of complexity. But can be critical to our success when investing in the markets. And this is true, regardless of the type of asset in question. Thus, it is crucial that, as investors, we seriously prepare to carry out these analyzes competently.

Besides to what has been mentioned, I consider that the elements that I am going to mention below are super important to achieve success when investing.

Image Source

Three elements that are critical to success when investing in the markets

From my experience I know that there are three factors that are of capital importance in the success we may have or not when investing in the markets. And they are the following:

1. Time management

Time management is essential. Because with so much news, so many assets and so many distractions that exist today is necessary. So, if we are not careful, we can fall into dispersion. Put another way, we can be busy with so many things at once that we can overlook the things (news and stocks) that we need to pay more attention to.

Of course, as investors, the quality of being multitasking individuals is also important. But always in a reasonable way, that does not limit us in any sense. But rather expands our capacity for action and reaction in the markets in a timely manner.

Although each investor must learn to manage its time in the way it considers appropriate. It is important that, based on the knowledge of the importance of this factor, ie takes care of doing it competently. To do this, establishing schedules and tasks, in addition to setting priorities, is vital.

Image Source

2. Capital management

The management of our capital is one of the most important factors that we must pay attention to as investors. Because this can be the difference between winning in the markets or going completely bankrupt. So the management of our money will always be a matter of great importance in this sense. Due to the implications it has around the risk factor.

As we well know, investing in the financial and crypto markets is a risky activity. Anyone who tells us otherwise would be lying to us. So we must know that no matter how much analysis we do. And no matter how well our investments are made. There will always be a risk of loss that cannot be completely eliminated.

Capital management helps us minimize the inherent risk of going bankrupt with our investments. Because it guarantees liquidity and the division of our capital to face these risks. As an example, we can divide our capital into three portions. 30% for investments. 30% for our daily living expenses and 40% to have liquidity. Because having liquidity will always be important in case a good investment opportunity appears or is elucidated at any given time.

But also, capital management will allow us to keep in mind the fact that we must diversify our investment portfolio in a wise and moderate manner. Because proper diversification is always advisable. As it will also expand our profit opportunities while decreasing our risks of loss. But we must also know that we cannot apply such diversification beyond a certain reasonable limit based on our available and managed capital.

Image Source

3. Management of our emotions

Just as managing our investment capital is important, an equally critical factor in being successful in the markets is managing our emotions respectively. Although emotions are a subjective factor, learning to master them will help us not fall prey to panic due to the FOMO and FUD prevailing today.

It must be kept in mind that the majority of those who lose when investing in the markets today do so because they let themselves be carried away by their emotions, which leads them to make bad decisions respectively. Because poor emotional management generates catastrophes in terms of investments.

A person who has compulsion to buy or sell based on what they hear or read about the markets is not suitable for making investments. So, knowing that emotional management is important, how can we achieve it? Easy, through our own self-knowledge, but also through knowledge of the market of the asset in which we are investing.

In this sense, we have to learn a valuable truth in the markets, and it is the fact that no analysis of any person (no matter how expert they may be) should take precedence over our own analyses respectively. So, it is essential that we learn to perform technical and fundamental analysis on any asset. Since they will help us to base our own impressions in the markets in order to make the best decisions in this regard.

Image Source

Being a competent investor is an exciting task

From all that has been said, we can see that being a competent investor today is an arduous task, but I also consider it to be something very exciting. And the most important thing in all this is to know that when we learn the quality of being competent investors in the markets, the world is ours.

Because we will be able to make good decisions when investing in any asset in the markets. Then we will know how to choose the best assets, we will know how to manage our capital and minimize risks. But we will also know how to manage our time and diversify our investments.

Needless to say, all of this will give us an accurate perspective on the markets and the task of being an investor and a special kind of intelligence that will allow us to be profitable at all times.

What do you think about the topic discussed? Please comment.

Gif created by @piensocrates