Managing your investments and trading account can be a time sometime be a time consuming and painful process. Nobody really LIKES to calculate exposure risk ratios, beta testing, portfolio allocation, etc. But it's extremely important that you do allocate enough time to managing you accounts across the board.
Here are 3 tips that can help managing your investments at little more fun and a little less painful:
- Set aside time each week to review your positions. Choose a time that's quiet and works easily within your own schedule. Don't think you can do this during your lunch break at work and still be able to focus all your attention on this one area. You may have to wake up early or stay up later; whatever the case just make time each week to completely review the risk/reward of all your positions.
- Plan, plan, plan, then trade. All too often I see beginning traders open an account and immediately make 10 trades. Then they sit back and start to analyze? What's the point now! You already made the trade! Good investment management sets aside some funds to invest first, then slowly looks for a great place to put that money to work. You should always plan your trade first, then trade the plan.
- Keep 10% in cash at all times. Looks folks, we are all human and make mistakes (myself included). This is the cardinal rule of trading and investing - keep money on hand for emergencies. I don't care how great the set-up or how "sure" you are that you can make money. If you lose everything and have nothing left to invest you are out of the game. Be smart and keep some money liquid!