Trading and discipline
Investing and discipline
After the first lockdown of 2020 and the news about savings interests dropping to 0%, waiting lists arose at the largest brokers in the Netherlands. Demand had grown wildly, and brokers weren’t ready to handle all this demand overnight.
Suddenly, there were two types of “new” investors. The first group were investors with assets of more than €250,000, who were confronted with negative savings rates and were looking for other ways to generate returns. And then there was the group with significantly smaller (or no) assets, who saw investing as an alternative to saving.
All these new investors had little to no experience with trading, and while a large proportion of these new investors immersed themselves in the subject, there was also a group that pretty much blindly dove into their investment adventure.
Investors that started investing this year, will now slowly start to see mostly positive figures. An encouraging thought. But will this continue?
Investing requires discipline
To be able to trade yourself and be profitable, you’ll need loads of time and knowledge. Something, not every new investor has. So if you want to get your hands dirty and start manual trading, these following eight tips will function as your guideline to the minimum requirements for any self-employed and novice investor.
Only invest what you have.
Harrowing stories of people who put all their savings into investments and ended up completely bankrupt still wander around many minds. So learn a lesson from these often life-changing mistakes: only invest what you have and don’t need.
Do you want to invest once, or do you want to invest monthly? Determine your budget, evaluate it and adjust if necessary. Always keep your finger on the pulse!
Make an inventory
Take a look at someone who has been investing for a while and learn their tricks. When you’re ready, always start with a low amount: an amount you can afford to lose. Invest this in an asset that you’ve followed for a while and that you think will suit you well. This gives you a chance to get used to the many fluctuations in the market!
Invest for the long run
Getting rich quick is not much more than an ideal. Investing comes with ups and downs. The shorter the time frame you invest, the less time there is for a market to recover. Give it time, and don’t panic at the first drop in the market. In addition, long-term investing provides an additional advantage: compound interest.
With traditional trading, you pay a specific amount per transaction. When you add them all up, things can get pretty expensive. So always keep this in mind when you buy and sell. This also applies to investing through an intermediary: in this case, you don’t just pay the transaction costs, but also the fee for the intermediary!
Not everyone is suited for dealing with high risks. If you lie awake at night when the market value drops 10%, you might want to skip the high-risk investments. Determine the risks you’re willing to take before you start investing, and adjust your investments accordingly.
Spread your risk
Investing always comes with risks. There is no such thing as a risk-free investment. To reduce the risk, you can choose to spread the amount you invest over different types of investment options.
Research and learn
If investing is new to you, you have a lot to deal with, like: a LOT. Make sure to keep yourself informed. Sign up for newsletters, read blogs and articles, and make sure to keep yourself up-to-date. It’s time-consuming but well worth it!
Deciding to do the trading yourself pretty much means that there’s no time for some Netflix and chill. You’re constantly working. What do you do if the prices drop, when is the right time to sell, and what about that new trend that seems to be developing?
Edward, an experienced investor, even used to set his alarm clock at night to check up on the market. “There must be another way, right?” he kept wondering.
Many new investors don’t have the needed discipline to invest and make a profit, which is entirely normal, by the way. And that’s where the good news comes in: there’s an alternative available, and it’s called automated trading. Until recently, automated trading was only available to the wealthiest 3% on the planet. They had access to the best trading strategies through (among others) hedge funds.
But making automated trading available to everyone isn’t too complicated. A trading strategy is ‘easily’ translated into an algorithm, and this algorithm, in its turn, will do the trading for you.
Automated trading via the BOTS app
When algorithms and supercomputers do the trading, all the discipline you need to trade manually is taken off your hands and executed by these supercomputers. Pretty handy, right? A pity that this used to be available to the rich with hedge funds only…
But all of this is in the past: the BOTS app was developed. An open platform where expert developers offer trading strategies (the algorithms mentioned above) for you to trade with. Using the BOTS app, everyone has access to automated trading! You don’t need to have a lot of money, either: you can start from as little as €50. Our primary motivation is to kick the investment world in the but and allow everyone to trade!
Edward (the guy who used to set his alarm clock in the middle of the night) has now almost completely switched to automated trading: “Automated trading is the future,” according to the experienced investor.
Need any help with anything?
Even though automated investing is incredibly easy, you might need some time to find your way around the app and discover all the options. So if you still have questions wandering around your mind, or you just can’t seem to figure it out, please do not hesitate to contact the BOTS support department.
There is no such thing as risk-free trading. It is possible to lose (part of) your stake.