1. The Value of Experience Over Theory

Books are fantastic educational resources, but nothing compares to the lessons learned through hands-on experience. When I began trading in 2021, I had a string of successful trades but failed to capitalize on my profits. I consumed financial literature daily, including the WSJ and The Economist, and closely monitored technical indicators.

However, a significant gap in my knowledge became evident: I struggled with knowing when to secure profits. I executed trades on Nividia, abrdn Physical Gold Shares ETF, and Bitcoin, only to lose money by not acting decisively when it mattered. Now, I ask myself, “How long do I plan to hold?” and “What benchmarks indicate success?” Maintaining objectivity and adhering to your trading goals is essential.

2. The Cynicism of Market News

Historically, stocks have appreciated in value 73% of the time since 1928, while bonds have shown growth in 82% of those years. As the saying goes, “Bears sound intelligent by being skeptical... but bulls are the ones who profit.”

I fell into the trap of shorting the U.S. dollar when inflation rates soared in 2022. I thought, “This is a great opportunity!” But the economic climate was universally bleak, and the dollar remained a safe haven despite its flaws.

3. Keep a Trading Journal

Whenever a trade goes south, reflect on what went wrong. Maintaining a journal can be invaluable. Analyze your technical assessments and document your trades. While fundamental analysis is crucial, I find technical analysis equally important as it provides real-time pricing data.

Remember, technical analysis isn't about making perfect predictions; it's a tool that helps you adapt to price movements.

4. Detach Emotionally from Trades

My six-month trading journey taught me the importance of emotional resilience. I’ve seen how passionate traders can become, often leading to poor decision-making. I once observed a young trader flaunting a Lamborghini adorned with Dogecoin stickers, only to see it seized due to unpaid tickets.

Many traders recount years of losses before finding profitability. The key is to maintain an emotionally detached approach and avoid getting swept up in the euphoria of trading.

5. A Lesson in Risk Management

I liken my trading setbacks to losing a luxury car. That’s why I don’t own one. In my mind, I’ve already experienced that loss. This brings me to another critical lesson: for every trading setup, consider a "reverse setup." Assess your exit strategy to determine if the trade aligns with your risk tolerance. If the reverse trade doesn’t make sense, it’s a clear sign to reconsider entering the market.