Robbie Burns, also known as The Naked Trader, shares his 12 top tips for successful investing.
I'm very lucky to be one of the few ISA millionaires. That is, money I built up on the stock market from regular amounts invested every year.
And you could join me, but beware: it’s all too easy to lose on the stock market if you get it wrong.
So I thought I'd hand out a few of my top tips to those of you who want to try and make a few quid. Or you can head this way to see how others have gone about becoming ISA millionaires.
This article is part of a wider series on investing, covering all areas from stocks and shares to buy-to-let, peer-to-peer and alternative investments. Click here to view the full guide.
1. Treat it like a business
It's not a hobby! Every buy you make is a business decision and must be thought out, and every share researched properly.
2. Cut your losses fast
If you buy something and it starts to tank, get rid of it. Once it goes down a lot you'll probably never sell it.
3. Set up a stop loss
Similarly, you should consider setting up stop losses for your investments. For example, if you buy something at 100p, tell your broker to sell it if it hits 90p. That way you might actually cut the loss.
4. Don't be scared
If you really want to make the buy, make it.
5. Understand your emotions
If you're a very emotional person then trading might not be for you. Trading has to be an unemotional business.
6. Don't trade too often
"Day traders" often lose. Newbies to investing find the more they trade, the more they lose. Some weeks I don't do anything. Most of my big money has come by holding onto companies for years.
7. Be cautious on commodities and Forex
So many traders lose trying to "trade Forex" (currencies). I think it's a mug's game and give it a wide berth.
8. Plan your trade
What will you do if it goes wrong? How much do you want to make from it and what's your timescale?
9. Beware of Twitter/bulletin boards
Don't just buy something because someone on Twitter did. Do your own research.
10. Use a Stocks & Shares ISA
You can put in £20,000 a year into the market tax-free. Why pay tax on your gains?
11. Only put in what you can afford.
Don't play with money you need. That could end in financial disaster.
12. Don't average down
In other words, don't buy more of something that you already bought higher so you can 'break even'. It may fall further, leaving you deeper in the red.
Hopefully, some of these tips will be of use to you. Perhaps the main thing I can tell you is not to be greedy – try and make your money over time.
If you try and become an overnight millionaire not only will it not happen, you'll probably lose your shirt as well.
The views expressed by the author do not necessarily reflect those of loveMONEY. This article does not constitute financial advice. You should speak to a professional financial adviser before engaging in any transaction.
This is an older article that has been updated. Robbie's book The Naked Trader is available from Amazon – his latest trades can be found on nakedtrader.co.uk – and he runs seminars on how to trade and invest for beginners. He has made more than £2 million from trading.
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