Investing and Speculation

Written by Ioannis Evangelos (Akis) Haramis


Continued from page 1

Individualists:

They tend to avoid extreme risk, do their own research, and act rationally.

Guardians:

They are typically older, more careful, and more risk averse.

Straight Arrows:

They fall in betweenrepparttar other four personalities and are typically very balanced.

In speculation two things will be always around:

A. There will always be people willing to speculate and

B. History always repeats itself!

Speculation objects, rules and technological methods will always be changing. But, what has happened before will most likely happen again.

Whether it's tulip bulbs, precious metals, bonds, lottery tickets, ball games, or stocks, human nature is human nature. Ignorance, fear, greed and hope determine how people react and thus how prices move and markets behave.

People have speculated on almost everything at one time or another. Speculating, trading and investing on stock prices have become an essential part of our lives and economy. Trading is just another word for speculating, and investing is nothing more than speculating, except that it supposedly encompasses a longer time horizon and for some reasons it implies less risk.

Speculation and gambling are similar, with a few important differences. One major difference is that sometimes, successful speculators profit due to their skill, while gamblers prospect due to their luck.

Whether a trader, a speculator, or a gambler in all casesrepparttar 150493 aim is to make a lot of money in a harry, and to be able to know when not to invest!

Copyright 2005 Ioannis - Evangelos (Akis) C. Haramis haramis@greekshares.com http://www.greekshares.com Ioannis - Evangelos (Akis) C. Haramis was born in Athens, Greece in 1951. He studied in Greece, in USA and in Belgium and has been active in the stock markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank and the editor of http://www.greekshares.com


Investing and Learning How to Lose

Written by Ioannis - Evangelos (Akis) C. Haramis


Continued from page 1

Yet, when most people start trading,repparttar only thing they think about isrepparttar 150492 profit objective. Countless hours are spent on discovering how to buy and sellrepparttar 150493 market with unwavering accuracy. Once they buy a market,repparttar 150494 amateur trader only thinks about how high isrepparttar 150495 market going to go. Little effort is put into considering how lowrepparttar 150496 market could go, and where they should get out in order to control their losses.

These thoughts, which are so distant fromrepparttar 150497 minds of most traders, are what separaterepparttar 150498 winners fromrepparttar 150499 losers.

Risk management isrepparttar 150500 practice of determining what percentage of your account to risk for each and every trade in order to maximizerepparttar 150501 expected profit potential of your trading strategy.

Once this amount is determined, this percentage must be translated into an absolute value and stop loss orders must be placed once a trade is entered in order to control potential losses at this value.

There is no guarantee that such efforts will control your losses, sincerepparttar 150502 market can gap in price beyond your stop loss order, resulting in losses greater than planned.

Copyright 2005 Ioannis - Evangelos (Akis) C. Haramis haramis@greekshares.com http://www.greekshares.com Ioannis - Evangelos (Akis) C. Haramis was born in Athens, Greece in 1951. He studied in Greece, in USA and in Belgium and has been active in the stock markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank and the editor of http://www.greekshares.com


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