When it comes to investing, bad habits are difficult to break. However, we have some useful tips that every investor can use to overcome such habits.

Monitor Your Performance

Measuring your performance gives way to track record of what has worked out well and what has not. This enables you to determine problems that you repeat. While some investors capture a great amount of details, you should at the very least document the:

• Overall market trend
• Sector trend
• Rationale for making the trade
• Exit target
• Trailing stop

Do this for every buy as well as sell positions. This kind of record will be very useful in assessing your investing activities over time and can be used to identify what barriers you are experiencing that hinder your success.

Identify what you want to Change

Check your past trading activity and search for the patterns that point to barriers that prevent you from being successful.

See if you impulsively buy the next ‘hot’ stock without doing proper research and checking. Double check your rationale and see if it proves to be wrong majority of times.

The idea here is to identify the investing behavior that serves as a barrier to your success.

Focus on what you want to Change

Changing your behavior requires a steadfast focus on what you seek to change. Like any effort to change any behavior, you must stay focus on the actions your take to reinforce the investing habit you wish to achieve.

If you feel that you are not focused on how to change your behavior, then you should take a break from your investing until you have regained your focus.

Lean how your will deal with losses

Losses are a part of investing. Learning how to deal with them is one of the cornerstones of successful investing behavior. It starts with predefining what your loss looks like through your stop loss and rationale for the trade.

Once this condition is met, you take the loss and should move on. Confronting and accepting the loss is a trading skill that is an essential behavior. By using an automatic process to execute a losing trade, you remove the emotion that comes from a loss. 

Specialize in one investing strategy

There are many ways to assess the market and pick stocks that can provide good investment opportunities.

All too often, investors become overwhelmed with all of the available information. Rather than trying to understand every perspective on the stock, it’s better to get to know one proven investing strategy. Even though you might miss some opportunities, you will still gain confidence in your approach with investing.

Eventually, when you have become an expert with this approach, you expand your knowledge base by learning a new approach that compliments the proven strategy.

Think about Probabilities

Since the market is always moving, it places the investors in a position that requires them to regularly assess the risk-reward ratio of every opportunity.

You cannot move the market, so you assess the greatest possibility that will move the market, key sectors, and the stocks that you are watching.

Charles Marshall