Why Some Succeed and Others Fail in the Stock Market

The Vast Majority

Successful stock investors always master two things: The Know-how and the emotional discipline. One without the other could lead any investor with the potential to be great, have mediocre results at best. Worse than that, an inconsistent money-losing machine. On the other hand, those who are somewhat profitable and commit to the markets achieve only average results because of one habit: Assuming how the market works based on theory or opinion, but not facts. To achieve superior results, taking your time to study and learn how the markets work is the only way.

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To Win, You Have To Be Calculated

To someone who gambles in the stock market, I like to give the example of a person playing the slot machine at a casino with a 99% win rate in an all-or-nothing game. The only condition in this? They have to play 100 times. So let's statistically say that they win 99 times. On the 100th, they will lose it all.

Investing in the stock market is a great road that could lead to riches. When you ask the average person about the stock market, they will most likely answer somewhere along the lines of "you have to be lucky," or "It's a gamble." The funny thing is, they are right. The hilarious thing, though, is that they couldn't be any more wrong. Many people in the past have found riches in the markets through pure luck and gambling. But most successful investors will attest that gambling and luck have nothing to do with their success. The simple fact is, they study ways to minimize their risks and reap great rewards. So to them, it is a low-risk, high reward game.

Through your journey as a stock trader, you will learn counter-intuitive things that you would never think were true. You will see how some of the "old-fashioned" believe about the stock market are false. Most importantly, a lot of the time, you will end up going against what feels natural. Imagine doubling your money five years in a row. That is what we call consistency. At that point, it would be safe to assume that you would most likely double your money in the sixth year. To do this, you will need to construct basic rules for yourself that will serve as a basis for your consistency. The second step would be to discipline yourself to stick with those rules.

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