Bad Habits in investing
5 March 2020 Queenie Wu
1.
Emotion driven
Too emotional to make investment decisions. We are being affected by our own emotion
every day. Sometimes too pessimistic,
sometimes too optimistic toward the market movement……. Sometimes wrong decisions may be resulted
2.
Risk averse
It is really difficult to strive a balance
between risk and return. High risk
implies high return. We are greedy but
we don’t want to accept risk. Sometimes
I am too hesitate to enter the market.
How to maximize our return under the risk constraint?
3.
Poor market timing
After setting my strategies on forex
investing, it is really difficult to implement my whole plan. Sometimes, we missed the chance as we cannot monitor
the market all day long.
4.
Impatience
It is difficult for me to have enormous
patience to wait. We have to wait until
the candle finished. We have to wait for
the strength of the candles faded. We
have to wait the reversal signal to be confirmed. We have to wait endless hours during wrong
decision….
5.
Insufficient market research
Too lazy to check all the news and do the
market research before all investment decisions….
How to stick to our investment plan
without emotional influence?
Possible solutions:
We have to set our strategic investment plan
in advance and stick to it. I am trying
to put my strategies in an EA. I am still
in the process of testing the iCustom EA in which I can attach some custom indicators
for forex trading. I have found
different indicators and trying to test each of them. Currently, this is the only possible solution
that I can think of to ensure we have the discipline required to stick to our investment
plan. On the one hand, robot trading may
handle the problem of discipline, emotion and market timing, on the other hand
it may arouse another problem of inflexible investment decisions in the case of
sudden adverse market movement, which may lead to the opposite of destructive performance-chasing
behavior. Again, this is another issue
of how to strive a balance between human decision and EA decision under risk
constraint. We may not be able to answer
this question. Anyway, let’s spend
sometime on the backtesting of the EAs.
Hope I can find one with long lasting good performance - high profit
factor and small drawdown percentage. Let’s
work hard together!
Warren Buffett Quote: “If you don't find a way to make
money while you sleep, you will work until you die.”
Do you know how to make passive income while you sleep
with automated Forex Robot?
