Most of the investors are losing money…
Around 85% of them lose money, 5%-10% are even and 5%-10% making money…
Bad statistics and I believe that many investors are not aware of it…
Investor who is coming to C2 in order to find a strategy, basically is more lucky than most of the other traders… He understand that he needs to be a professional in this field in order to make profits and he is looking after a professional exactly the same way he is looking for a good doctor when he feel pains…
But this is only the first step to achieve the goal…
The second step is to do a money management and risk management for his own funds…
What does it mean?
See few stories here…
From my experience in a year and four months here in C2, I saw many investors who made the wrong decisions one after the other. Even when the investors realized that they had made a mistake, they could not make a new decision that would improve their situation…
Ego and emotions play key roles among many investors and lead them to make erroneous investment decisions and bad timing.
I have gathered here the classic mistakes I have encountered with my investors over the past year.
- Wrong allocation of funds - an investor who was subscribed to the VIXTrader Professional and the first and the second trade caused him a loss of 2% - 3%… He decided to cancel the listing due to this small loss because he entered with too much money and could not withstand in a small loss in percentage but maybe in dollars it was significant for him. In a classic way, immediately after canceling, a new high was made…
After a while he re-registered and again lost immediately a few percent and again canceled and again the strategy reached a new high…
So what happened here? It turns out that only an investor who carries out risk management for his money and allocates the right amount for him to the strategy, is the one who can persist in it and harvest the fruits that it can give.
- Fear of heights - An investor who doubled his money in the past year informed me few weeks ago that he decided to leave because he thinks that after the market falls, the strategy will stop working. Of course, he canceled at the lowest point because of irrational fear…
I do not know if he did the right decision from the performance point of view but I am sure that he did wrong decision according to risk management…
What is the solution? The fear can be irrational, so my advice to an investor suffering from such fear is to reduce the amount of money he invests through the strategy. If the strategy loses money then the investor will lose less and if the strategy will gain then the investor can return later to full investment with more confidence…
- Lack of patience - an investor enter to the strategy and discovered that at the end of the month the strategy earned but a competitive strategy gained more…He canceled his registration for my strategy and registered for the other strategy. Immediately after he was registered, he lost almost all of his investment… Investor disappeared…
The solution in this case, in my opinion, is that the investor should allocate to the strategy an amount that can be treated as long-term savings and compare it to other strategies every six months or more…
I would be happy to see here investors tell us about their experience and the mistakes they made here… Developers may share from their experienced with investors in their strategies…These things can be of great value to most of the subscribers…
it seems to me that money management and risk management are of course the key of any good strategy, but the investor must manage wisely his money as well and invest only those amounts that will allow him to sleep at night comfortably…