Could I pull the trigger?

Back in the early days of my investing I simply set up monthly payments into the investments that I was buying (mostly Investment Trusts). Nice and easy. No decision making required. I kept telling myself that I wanted the markets to crash, as it meant that I would be buying at a lower price. When markets were rising I simply enjoyed the asset valuation rise. Nowadays, having made the decision to change my investment style I am faced with the challenge of ‘pulling the trigger’, that is, making a lump-sum investment, when I get a ‘buy’ signal from my investment strategy. When I first started trading and investing, I found it surprisingly difficult to make a new investment. My mind would fill with images of poverty and debt and the poorhouse…. The mind can can be surprisingly unhelpful at stressful times.

The army have, presumably sussed this one out: we need training, so that when the real thing happens we can act automatically. Hence, training in the Brecon Beacons and mocked up replicas of towns. Practice, practice, practice, allows us to follow-through in real life. How can traders do this?

I started with ‘paper-trading’ - theoretical trading that does not risk real money. Many investment platforms allow this opportunity. The downside is that paper trading does not kick off the stress-hormones that make us fearful. Personally, I found the only way to make myself progress and actually trade was to start with modest amounts of real money and risk losing real money.

Trend-trading involves a very different mind-set to monthly investing! Living with the stress of possibly being ‘wrong’ is something that I have had to get used to....

See you next week!