Do you want to know how to earn money in the Stock Exchange? Then you will find it very useful to know what types of "investor profiles" you will find in the markets and, especially, how each of them can help you invest better.
On the Stock Exchange, as in most financial markets, many different people coexist, each with different motivations, objectives and levels of knowledge and experience. But, despite this great diversity, over the years I have come to the conclusion that there are five well-differentiated stock market characters within which the vast majority of the participants of the Stock Exchange fit.
So today I am going to talk to you about each of them so that you know their objectives and their ways of acting, you can identify them and, in addition, I am going to tell you how they can help you invest better. Ah, I already warn you that many of them belong to the field of speculation, so do not be surprised if you see that I talk about it.
And, before I begin, I want to clarify that this article is not intended to be critical but merely descriptive, since over the years I myself have been each and every one of the stock market characters that I am going to present to you next, exactly in the same order by which I'm going to show you.
As you can imagine, the Player or Gambler loses money continuously. From time to time he gets some small benefits that encourage him to continue, but these are not really enough to offset the red numbers of most of his bets.
So, if you lose money repeatedly, why do you keep betting again and again? Well to satisfy the basic need for which he approached the Stock Exchange: entertain. The Player or Gambler does not want to know how to make money on the Stock Exchange, since what he is looking for is entertainment and he is willing to pay for it in the form of constant losses.
The Player or Gambler looks for emotions and fun , that's why he treats the Stock Exchange as a game of chance. Do you think that people go to casinos to make money? Obviously not, that is only the excuse that most people tell themselves to give themselves permission and enjoy the feeling that gives them the possibility of making money. What they really want is the emotion and adrenaline that gives free rein to their fantasies about money fast and easy.
For this reason, if you try to convince a Player or Gambler to train to really learn how to make money in the stock market, you will almost certainly refuse. At the end of the day, to study and understand its operation would mean to stop having this almost mystical relationship with the markets that provide the fun you are looking for.
The player or gambler is excited to continually think about those actions that will come up suddenly and make you earn a lot of fast and easy money overnight. This is why it is the ideal target for the interested recommendations of the brokers, the blows of friends and family and the advice of the so-called stock market gurus.
When you start in the stock market it is very easy to fall into the profile of the Player or Gambler, due above all to the lack of knowledge and experience. However, I refuse to treat the stock market as a game of chance and lose your money without further ado.
So, if you are starting and want to know how to make money in the stock market you must avoid at all costs become a Player or Gambler , so I recommend this step by step tutorial with everything you should do before you start investing in the stock market. In addition, you must make sure you start with a solid and winning investment philosophy from the minute one.
Therefore, the Player or Gambler will give you the opportunity to buy the shares of quality companies at lower prices than you would rationally expect, helping you to boost the profitability of your investments and increase your margin of safety.
Throughout his experience he has been testing many different systems, usually belonging to the field of speculation. However, it seems that none brings benefits consistently over time.
Sometimes, when he manages to make money continuously for a short period, he believes that he has finally found his long-awaited perfect strategy. But, unfortunately, sooner or later he always ends up suffering a losing streak that also makes him lose faith in his beloved system.
It is then that he reinforces his belief that something must exist, such as a combination of indicators that tell him exactly when to buy and when to sell, or some way to predict with reliability and certainty what stock prices are going to do in the future. the future. In addition, his enormous fear of losing money forces him to discard any strategy that does not guarantee 100% effectiveness.
The Tireless Discoverer believes deeply in the idea that such a perfect strategy exists and that it is known only by a privileged few, among them the so-called stock market gurus. He thinks that all he has to do is keep training and practicing until he finds her, even if it means losing money during this tireless search process.
So, armed with hope after each bad patch, the Tireless Discoverer decides to continue investigating, jumping from strategy to strategy every few months (or even every few weeks in the most extreme cases). And the main objective of the tireless discovery is to find the Holy Grail of the Stock Exchange. In other words, and although it sounds strange and messy, the tireless discoverer does not want to make money on the stock market, but wants to "know how to make money on the stock market."
If you notice, the Tireless Discoverer is the character opposed to the Player or Gambler, since while the latter has no intention of forming nor any knowledge on the subject, the Tireless Discoverer is permanently in search of that magic formula that guarantees him to win always . In addition, it is also the character who fantasizes about this miraculous strategy that provides a return of 10% per month, or more.
And at the same time, you must accept that there is no Holy Grail of the Stock Exchange and that to make money continuously with your investments you do not need a perfect strategy , since it does not exist. What you do need is a methodology good enough to get a good return on your money in exchange for little risk .
Therefore, the tireless Discoverer helps you by reminding you at all times that there is no perfect strategy on the stock market that guarantees you always win and that you should not pay attention to those who want to make you believe otherwise.
The consistent speculator is very professional and understands that if he dedicates himself to buying and selling shares repeatedly he will not make money with all his operations, so he trusts his system even when he shows a string of consecutive losses.
The main objective of the consistent speculator is to have his own work . He has found in the financial markets a profession that he can develop from home, without being subordinated to any boss and that with enough money allows him to obtain a salary in exchange for dedicating enough hours of his time to the market.
The consistent speculator is a character that costs a lot to find, since there are not many people who want to spend a lot of hours a day buying and selling shares, enriching the broker and taking great risks to end up with a lower return than initially expected.
Notice that the fact of forming separates him from the Gambler or Player. In the same way, having an adequate psychology allows him to understand that he can not completely eliminate the risk of his operations, which also separates him from the restless Discoverer.
Unlike the other two, which are based on their emotions, the consistent speculator follows a very disciplined methodology, since he knows that in unstructured environments such as the stock market, it is up to him to establish the necessary control measures to preserve his capital.
Knowing this, you can already imagine who will buy you those stocks that are at historic highs and that you want to sell to make big capital gains and get rid of a tremendously overvalued stock, right?
Therefore, the consistent Speculator will mainly help you sell overvalued stocks that no other investor would want to buy from you , because when an stock is overvalued it increases the risk enormously and drastically reduces the potential return, both via surplus value and through dividends.
In addition, it has a much higher level of spreadsheet management than usual and has a deep knowledge of very sophisticated financial products.
Sophisticated Financier works normally in Audit, Investment Banking or as an Advisory of complex financial products, of which nobody can understand how they really work. In addition, due to their studies and their permanent contact with the financial world, they have a lot of self-confidence regarding their investments.
Well, when the sophisticated financier approaches the stock market it seems that its objective is not to make money, but to apply complex methodologies that only someone of the same profile can understand. Due to its great analytical capacity, the sophisticated Financial tends to perform complex calculations, apply complicated mathematical formulas and unite everything in cliometric calculation sheets that form mathematical models worthy of admiration.
However, the sophisticated financier runs the risk of focusing more on his complicated and elaborate mathematical models than on making money, and that excessively complex calculations can distance him from reality by not being applicable in practice.
The fact, in addition, of having a wide level of knowledge about complex financial products, such as derivative instruments and other financial paraphernalia, means that the sophisticated Financier can feel enormous temptations to apply absolutely all this knowledge in his personal investments, increasing its complexity and further away from a profitable strategy in practice.
eye! I'm not saying that sophisticated financiers do not know about finance, on the contrary, they know more than any other person, that you can be sure of. However, in today's universities and business schools, certain obsolete methodologies are still being taught, such as the Efficient Market Hypothesis, which leads many highly qualified professionals to lose money in the Stock Exchange.
Therefore, if you ever realize that in your calculations there are more Greek letters than numbers, surely it will be a clear sign that you are becoming a sophisticated Financial, at which point you should consider debugging your system to do so. applicable in practice.
It has a very clear objective in the stock market: create and maintain a heritage that works for him . He is aware that he must focus on the stock market from a business perspective and not as a casino, and he knows that there is no perfect strategy that guarantees 100% effectiveness.
He does not want to spend the whole day in front of his computer buying and selling shares. He does not want a second job, but can someday get enough income with his investments to leave the one he already has and, of course, he knows that he does not need to understand or use indecipherable financial products or complex mathematical models with an infinity of variables.
In short, the awake investor knows and applies the 5 key keys to invest successfully in the stock market , so if you still do not know or want to delve into them, here is my free eBook in which I speak precisely about them.
He also knows that he must control his emotions, especially fear, in order to take advantage of the big downs of the stock market, at which time he is able to correctly apply techniques such as averaging downwards .
Put simply, the Investor awakened:
Steps to follow to become an awake Investor
If you want to become an awake Investor able to get a good return for your money in exchange for a low level of risk , you should focus on the following aspects:
And, to finish, I want to remind you that the most usual thing is that when someone starts in the stock market he goes through most of these stages, usually in the same order in which I presented them to you . As I told you at the beginning, I went through all of them myself and at some point I was each and every one of these stock market characters.
For this reason, if you want to know how to make money in the stock market through your investments, I encourage you to train yourself to become an investor directly awake, saving you time and money that will consume the other stages.
On the Stock Exchange, as in most financial markets, many different people coexist, each with different motivations, objectives and levels of knowledge and experience. But, despite this great diversity, over the years I have come to the conclusion that there are five well-differentiated stock market characters within which the vast majority of the participants of the Stock Exchange fit.
So today I am going to talk to you about each of them so that you know their objectives and their ways of acting, you can identify them and, in addition, I am going to tell you how they can help you invest better. Ah, I already warn you that many of them belong to the field of speculation, so do not be surprised if you see that I talk about it.
And, before I begin, I want to clarify that this article is not intended to be critical but merely descriptive, since over the years I myself have been each and every one of the stock market characters that I am going to present to you next, exactly in the same order by which I'm going to show you.
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Stock Market Character 1: The Player or Gambler
The Player or Gambler is one of the most abundant characters in the world of the Stock Exchange . It is characterized mainly by not having any solid investment philosophy , any planned strategy and having virtually no stock market knowledge. It simply limits itself to placing bets as if it were in a casino, so it treats the stock market as a game of chance.As you can imagine, the Player or Gambler loses money continuously. From time to time he gets some small benefits that encourage him to continue, but these are not really enough to offset the red numbers of most of his bets.
So, if you lose money repeatedly, why do you keep betting again and again? Well to satisfy the basic need for which he approached the Stock Exchange: entertain. The Player or Gambler does not want to know how to make money on the Stock Exchange, since what he is looking for is entertainment and he is willing to pay for it in the form of constant losses.
The Player or Gambler looks for emotions and fun , that's why he treats the Stock Exchange as a game of chance. Do you think that people go to casinos to make money? Obviously not, that is only the excuse that most people tell themselves to give themselves permission and enjoy the feeling that gives them the possibility of making money. What they really want is the emotion and adrenaline that gives free rein to their fantasies about money fast and easy.
For this reason, if you try to convince a Player or Gambler to train to really learn how to make money in the stock market, you will almost certainly refuse. At the end of the day, to study and understand its operation would mean to stop having this almost mystical relationship with the markets that provide the fun you are looking for.
The player or gambler is excited to continually think about those actions that will come up suddenly and make you earn a lot of fast and easy money overnight. This is why it is the ideal target for the interested recommendations of the brokers, the blows of friends and family and the advice of the so-called stock market gurus.
When you start in the stock market it is very easy to fall into the profile of the Player or Gambler, due above all to the lack of knowledge and experience. However, I refuse to treat the stock market as a game of chance and lose your money without further ado.
So, if you are starting and want to know how to make money in the stock market you must avoid at all costs become a Player or Gambler , so I recommend this step by step tutorial with everything you should do before you start investing in the stock market. In addition, you must make sure you start with a solid and winning investment philosophy from the minute one.
How to make money on the Stock Exchange thanks to the Player or Gambler
Being very emotional, the Player or Player is easily frightened and makes decisions in a hasty and baseless manner. It is not surprising, then, that when the stock market begins to fall somewhat more than what could be considered usual, it panics and wants to get rid of all its shares at whatever price. And, when enough players or betters come together, the prices tend to fall more strongly, since they accept lower prices every time.Therefore, the Player or Gambler will give you the opportunity to buy the shares of quality companies at lower prices than you would rationally expect, helping you to boost the profitability of your investments and increase your margin of safety.
Stock Market Character 2: The Tireless Discoverer
The tireless Discover, unlike the Player or Gambler, knows that to win money in the stock market must be properly formed, establish a winning strategy and follow it faithfully. However, he does not conform to any strategy, but wants the perfect strategy. And he is willing to do whatever it takes to find it.Throughout his experience he has been testing many different systems, usually belonging to the field of speculation. However, it seems that none brings benefits consistently over time.
Sometimes, when he manages to make money continuously for a short period, he believes that he has finally found his long-awaited perfect strategy. But, unfortunately, sooner or later he always ends up suffering a losing streak that also makes him lose faith in his beloved system.
It is then that he reinforces his belief that something must exist, such as a combination of indicators that tell him exactly when to buy and when to sell, or some way to predict with reliability and certainty what stock prices are going to do in the future. the future. In addition, his enormous fear of losing money forces him to discard any strategy that does not guarantee 100% effectiveness.
The Tireless Discoverer believes deeply in the idea that such a perfect strategy exists and that it is known only by a privileged few, among them the so-called stock market gurus. He thinks that all he has to do is keep training and practicing until he finds her, even if it means losing money during this tireless search process.
So, armed with hope after each bad patch, the Tireless Discoverer decides to continue investigating, jumping from strategy to strategy every few months (or even every few weeks in the most extreme cases). And the main objective of the tireless discovery is to find the Holy Grail of the Stock Exchange. In other words, and although it sounds strange and messy, the tireless discoverer does not want to make money on the stock market, but wants to "know how to make money on the stock market."
If you notice, the Tireless Discoverer is the character opposed to the Player or Gambler, since while the latter has no intention of forming nor any knowledge on the subject, the Tireless Discoverer is permanently in search of that magic formula that guarantees him to win always . In addition, it is also the character who fantasizes about this miraculous strategy that provides a return of 10% per month, or more.
How to earn money on the Stock Exchange thanks to the tireless Discover
Well, if you really want to know how to earn money in the stock market, you must avoid at all costs to join the already very large group of tireless Discover. What you can do is convert your obsession to improve motivation to train, learn and start applying in practice everything you learn.And at the same time, you must accept that there is no Holy Grail of the Stock Exchange and that to make money continuously with your investments you do not need a perfect strategy , since it does not exist. What you do need is a methodology good enough to get a good return on your money in exchange for little risk .
Therefore, the tireless Discoverer helps you by reminding you at all times that there is no perfect strategy on the stock market that guarantees you always win and that you should not pay attention to those who want to make you believe otherwise.
Stock Market Character 3: The Consistent Speculator
The consistent speculator is usually a former player or bettor reconverted to discover tireless that , after much training, discipline and a proper psychology, has managed to find, understand and adapt to your personality a system of speculation that allows you to obtain more or less benefits consistent over timeThe consistent speculator is very professional and understands that if he dedicates himself to buying and selling shares repeatedly he will not make money with all his operations, so he trusts his system even when he shows a string of consecutive losses.
The main objective of the consistent speculator is to have his own work . He has found in the financial markets a profession that he can develop from home, without being subordinated to any boss and that with enough money allows him to obtain a salary in exchange for dedicating enough hours of his time to the market.
The consistent speculator is a character that costs a lot to find, since there are not many people who want to spend a lot of hours a day buying and selling shares, enriching the broker and taking great risks to end up with a lower return than initially expected.
Notice that the fact of forming separates him from the Gambler or Player. In the same way, having an adequate psychology allows him to understand that he can not completely eliminate the risk of his operations, which also separates him from the restless Discoverer.
Unlike the other two, which are based on their emotions, the consistent speculator follows a very disciplined methodology, since he knows that in unstructured environments such as the stock market, it is up to him to establish the necessary control measures to preserve his capital.
How to make money in the Stock Exchange thanks to the consistent speculator
Given that most of the most popular trading systems that are found on the network give signals of purchase when the price breaks up resistance, it is not surprising that many speculators buy at maximum.Knowing this, you can already imagine who will buy you those stocks that are at historic highs and that you want to sell to make big capital gains and get rid of a tremendously overvalued stock, right?
Therefore, the consistent Speculator will mainly help you sell overvalued stocks that no other investor would want to buy from you , because when an stock is overvalued it increases the risk enormously and drastically reduces the potential return, both via surplus value and through dividends.
Stock Market Character 4: The Sophisticated Financier
The sophisticated Financiers is a profile with a high level of academic education in finance. It usually comes from university studies related to the economy or the financial world, and has sometimes passed through the classrooms of the most prestigious business schools in the world.In addition, it has a much higher level of spreadsheet management than usual and has a deep knowledge of very sophisticated financial products.
Sophisticated Financier works normally in Audit, Investment Banking or as an Advisory of complex financial products, of which nobody can understand how they really work. In addition, due to their studies and their permanent contact with the financial world, they have a lot of self-confidence regarding their investments.
Well, when the sophisticated financier approaches the stock market it seems that its objective is not to make money, but to apply complex methodologies that only someone of the same profile can understand. Due to its great analytical capacity, the sophisticated Financial tends to perform complex calculations, apply complicated mathematical formulas and unite everything in cliometric calculation sheets that form mathematical models worthy of admiration.
However, the sophisticated financier runs the risk of focusing more on his complicated and elaborate mathematical models than on making money, and that excessively complex calculations can distance him from reality by not being applicable in practice.
The fact, in addition, of having a wide level of knowledge about complex financial products, such as derivative instruments and other financial paraphernalia, means that the sophisticated Financier can feel enormous temptations to apply absolutely all this knowledge in his personal investments, increasing its complexity and further away from a profitable strategy in practice.
eye! I'm not saying that sophisticated financiers do not know about finance, on the contrary, they know more than any other person, that you can be sure of. However, in today's universities and business schools, certain obsolete methodologies are still being taught, such as the Efficient Market Hypothesis, which leads many highly qualified professionals to lose money in the Stock Exchange.
How to earn money in the Stock Exchange thanks to the sophisticated Financial
Well, the sophisticated Financier reminds you that , regardless of your ability to elaborate complex mathematical models, you should keep your strategy and methodology as simple as possible . Regarding mathematics, to invest successfully you just need to add, subtract, multiply and divide , and basic knowledge about spreadsheets is more than enough to capture those numbers.Therefore, if you ever realize that in your calculations there are more Greek letters than numbers, surely it will be a clear sign that you are becoming a sophisticated Financial, at which point you should consider debugging your system to do so. applicable in practice.
Stock Market Character 5: The Investor Awake
The awake investor knows that in order to make money in the stock market in a consistent manner in the long term, he needs a solid, robust and profitable strategy that allows him to obtain a good and growing profitability for his money in exchange for assuming a low level of risk .It has a very clear objective in the stock market: create and maintain a heritage that works for him . He is aware that he must focus on the stock market from a business perspective and not as a casino, and he knows that there is no perfect strategy that guarantees 100% effectiveness.
He does not want to spend the whole day in front of his computer buying and selling shares. He does not want a second job, but can someday get enough income with his investments to leave the one he already has and, of course, he knows that he does not need to understand or use indecipherable financial products or complex mathematical models with an infinity of variables.
In short, the awake investor knows and applies the 5 key keys to invest successfully in the stock market , so if you still do not know or want to delve into them, here is my free eBook in which I speak precisely about them.
He also knows that he must control his emotions, especially fear, in order to take advantage of the big downs of the stock market, at which time he is able to correctly apply techniques such as averaging downwards .
Put simply, the Investor awakened:
- Use the Exchange to earn money, not to entertain yourself.
- It uses a solid, robust and profitable methodology that knows that it is not perfect.
- He does not want to work all day in front of the computer, but his investments work for him.
- He keeps his calculations as simple as possible while they are effective, without getting lost in complex mathematical models.
How to make money thanks to the awake investor
As you may have already noticed, the awake Investor is the profile that we like in Despierta Tu Dinero, will this similarity have something to do with the names? Therefore, the best way to earn money on the Exchange, thanks to the Investor awakens, is to become him. It's as simple as that.Steps to follow to become an awake Investor
If you want to become an awake Investor able to get a good return for your money in exchange for a low level of risk , you should focus on the following aspects:
- Look at the stock market from a business perspective
- Prepare everything you need to start investing
- Buy only quality companies
- Wait for the right moment to buy your shares
- Manage your portfolio as a whole
- Remember that if you want to create and maintain a heritage that works for you and generates income forever, you should not forget any of these aspects. Therefore, I encourage you to continue deepening in each one of them.
Conclusion
To summarize, here are the five stock market characters that you will find on the Stock Exchange, with their respective objectives and ways to help you invest better:And, to finish, I want to remind you that the most usual thing is that when someone starts in the stock market he goes through most of these stages, usually in the same order in which I presented them to you . As I told you at the beginning, I went through all of them myself and at some point I was each and every one of these stock market characters.
For this reason, if you want to know how to make money in the stock market through your investments, I encourage you to train yourself to become an investor directly awake, saving you time and money that will consume the other stages.
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