Since the coronavirus outbreak, the stock market has been very volatile. I’m not a big stock trader, but I hold an ISA stock account and trade small equity to make a better return than just putting the money in a savings account. It hasn’t been a success; however, it hasn’t been a failure either. The profits I’ve earned are more than my losses, but they are not significant. I still need to work every day to make a living, but the experiences have been fascinating. I’ve experienced many highs and lows.
There are many approaches to tackle the market, such as fundamental analysis, chart analysis, etc. One thing we have to also take into account is our emotions. How we trade on the day can easily depend on how we feel on the day. How the market moves depends on how traders around the world perceive the news. The moment there is bad news like a possible second wave of coronavirus, the market plunges sharply. The market then recovers a few days later if good news like the easing of a lockdown or provision of further government funding is announced.
While trying to learn more about trading, I read (more precisely, I listened to) a book called Market Mind Games by Denise Shull, and it was interesting to learn how we trade mimics how we act in other parts of life. For example, some people can’t seem to commit their money to start trading because they have a fear of making the wrong decision, and they can hear their mother muttering in the background – I told you so, I said you need to be careful. How we do anything is based on who we are. I’m looking forward to observing my behavior during trades and see if I can find any similarities in how I behave in and out of the market.