Do You Take Action To Minimize Loss and Maximize Profit?
Do you make investments to lose money? Of course, not. You expect to get a return on your investment. You don't want to lose the initial capital that you invest. When you do trading, you love to make a huge profit. But when lose your capital and literally make your account balance zero, this is something you never expect.
It will be better if you can see the future. But that is not possible. From your research and analysis, you can make an educated guess about what would happen. The problem is, when you see some experts talk about which way the crypto market would go, you assume that is going to happen.
No experts can guarantee how things will play out at a specific time. You hear the disclaimer that what they say is not financial advice. They indeed share their analysis, and you can learn from it. But don't think that is what is going to happen next.
When you make an investment, you think for the long term. You set the time for how long you will stay invested in that particular asset. It gets easier to make decisions because you have a clear vision. You want to maximize the return, and at the same time, you try to minimize the risk.
If you see things change and it goes in the opposite direction, you should take action. You are losing money from your investment. You can exit at that position at least you can minimize your loss. You should have a plan before making investments so that you can take action accordingly.
While doing trading, you have to follow your system. The crypto price goes up, so you just buy a cryptocurrency. You will not have any clue in case the price moves in the opposite direction. You have to define your entry point and see how much risk you are taking.
What is the profit target? Are you taking more risk for a profit in trading Usually, the risk and reward ratio is 1:2. You are not supposed to take an entry where you take more risk than reward. After taking entry, you need to execute your plan.
Sometimes you are happy to see that the price is going up. You are supposed to take a profit when it reaches your profit target, but you feel the price will keep rising. Later, the price falls suddenly, and that trade turns into a loss.
Again when you see the price goes down and it is about to hit your stop loss, you just remove the stop loss. You don't like to take that loss. Later, you have to take a huge loss.
You set stop loss in trading in order to minimize loss. If you don't take action and take a small loss, you may lose your trading profit along with capital. Emotions will come on the way since we are human beings. But doing the right thing is always right whether you do trading or investment.
So do your analysis and make a plan for trading and investments. Taking action in time can help you minimize your loss and maximize your profit in trading and investment. What do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
About Me
Hi, I am Rezoanul Vibes. I'm a content creator and passionate learner. I write about lifestyle, finance, martial arts, and digital marketing. I'm glad to meet amazing people all over the world.
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