Unfortunately, mass market emotions are essential for stock market, otherwise it could not move up and down, some people worry more on stagnant market, not greedy (bullish) or fearful (bearish) markets with clear trend. A trader or an investor could leverage on these market emotions for own gains.

So, to position in stocks, No 1 consideration is own personality:
1) Traders – understand the daily up and down sometimes is almost unpredictable as sudden news could change the stock prices within 1 min. Therefore, traders learn to extend the analysis from days to weeks to even months to have an overview with stronger trend. Trend is friend to a trader.

For risk management, traders would limit the max loss of each trade, applying “SET” (Stop loss, Entry Price, Take Profit) in trading plan, execute strictly.

2) Investors – who hardly monitor the market as main objective is to let the money grow by itself through longer term holding. Investors understand that emotions or even “crisis” (eg Coronavirus) could be short term, therefore focusing more in business and financial analysis of companies before investing to ensure a higher winning probability.

For risk management, investors follow diversification over a portfolio of 10-20 global giant stocks. Ideally, align with optimism to buy low during global financial crisis but it is not a must to buy low (great patience is required – 5 or even 10 years of waiting), in fact, buying at fair price is fine but need to focus on stock selection (What to Buy is key).

Learn from Dr Tee free 4 hour stock investment course to understand how to position as a trader vs an investor in the current stock market: www.ein55.com