Posted on October 20, 2010 by Rich Browne

The thing to remember when you are investing is that unless you are doing it full time you are not a professional investor.

Professional investors work for firms that spend vast fortunes analyzing the markets to get the information that they then work on to try and get a handle on what is going to go up and what will go down.

So with that firmly in mind what can you do to avoid losing money. Well in truth there is nothing that you can probably do to stop losing money if the market goes down but what you can do is try and reduce the risk in what you invest in and to do that you need to look at a few things, consider what you want to do and what is best for you.

First you must study what is going on. To have knowledge of what is gong on in the world of business is one thing but you need to think a little wider than that. The world and the markets that are traded around the work are affected by all sorts of events. Earth quakes, wars, elections and even sport. To consider what is going on in the world as well as what is going on in the company that you are going to invest in are things to consider. A good knowledge of what you are going to invest in and a consideration of what might effect what you are going to invest in are of up-most importance in your decision making process. And once you have studied and made a choice then you have to keep on watching to make sure that nothing happens while you have invested.

So once you have made the decision to invest then you need to know how to invest. Be patient. If you think a stock is worth one thing and it is too high in your opinion then wait. If you are right then it will come down. Do not just jump on as you can see it going up. The next thing you know is that it will come down you will have missed timed your buying and then you lose. If you are not sure watch the stock see what is happening and think about it before you buy.

Once you are trading then do not buy and sell too much. Calculate what you want to make. Consider how long that might take and how long you are wiling to have your money in the stock. If you buy and sell on a regular daily basis the amount of money that you will spend in cost of trades will cost you as much as you are making so be very careful before you buy and before you sell.

Beware of fear and look out for greed. Fare of losing of missing out. Hanging on to think I could make more is not necessarily the best way of trading any thing. It is your money but you can not control the market once you have invested. So try and be detached from what you can see and try and concentrate on what you originally wanted. If it was for the long term then hang on. If it was for the sort term make what you thought you could have made and then get out. Do not hang on till the price starts to drop. Try to control your fear and your greed. Try and become detached form a plan and stick to it. Not always easy as it easier said than done.