Trading lessons from day-to-day games

By September 26, 2014 Trading 3 Comments
Trading lessons from day-to-day games

The marketplace is inundated with thousands of books and other reading material related to investing and trading. These books give a good insight about the fundamentals governing the capital markets as well as proven technical analysis tricks. Aside from these, we can garner important investing skills from games which we play in our everyday life.

Games for learning stock market lessons

Let us talk about important lessons which we can learn from the well known games like Poker and Monopoly.

Trading lessons from Poker

The most basic lesson is, never thinking of trading as gambling. If you want to gamble, go to some casino and try your luck. It would be great fun if you are prosperous. But when trading with your tough gained money, get a mindset of a poker player.

Trading Lessons from Poker

Renowned poker players take calculated risks in the game. They very well know, which hand to play and which hand to fold. They focus on how to limit losses and smartly make the most from a good hand. We can consider this as trading with discipline and religiously sticking with pre planned stop losses. Besides, whenever there is an opportunity in the marketplace, a trader should not doubt his trade and should gain maximum from it.

Also, a trader should know when to trade and when to sit mum. A trader should also be aware that he should not get excited seeing a great deal and eventually losing in excitement. Strike while the iron is hot.

Also Read : 10 Golden Rules for Investors 

Investing lessons from Monopoly

If you’ve played Monopoly in your childhood, you can easily connect it to investing. Some investment lessons are as follows:

Trading Lessons from Monopoly

Patience

To win at Monopoly, you need a proper game plan. You just can’t pull ahead by buying everything where the dice lands you. You need to be patient to proceed forward with your design. If you impatiently buy everything, you will drain your wealth soon. Alike is the patience involved in investing. Patience is an important component of a disciplined investment.

Trading Account

Diversify

You cannot gain ground by simply owning a single block on the board and loading it up with houses and hotels.The prospects of the opponent landing on that block are rare. Similarly, it is difficult to win by buying everything on the board without building houses and hotels. Likewise, in investing or trading, you cannot place your entire wealth in one or two stocks.Thither is a possibility of your analysis going wrong and you are left with naught.Besides, owning many stocks can be disastrous if a few stocks will wipe away the combined earnings from the remaining pile.Branch out your money smartly across different industries as well as asset classes.

Don’t be cashless

To win in Monopoly, you require to receive cash in hand in the remainder.If you randomly buy every property, you will move out of hard currency at the time of paying money to other players.You might have to sell those properties at a discounted price. This will be your losing point. Always have some excess cash when lucrative opportunities arrive in the marketplace.

The most expensive asset might not be the best investment

Participants want to own expensive points on the board as they deliver a high monetary return.But they forget to calculate the percent coming back on that investment and also their maintenance charges are high. So always focus on the value that you get for risking your money.

Also Read : Facts You May Not Know About Warren Buffett

Concentrate on cash flow

Your win at Monopoly is dependent on the cash you get as rent from your properties. And then you should place houses and hotels in the properties which will bring you good returns on your investments.Investing in stocks, which suffer a full history of assured dividends can be an instance of this.

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Conclusion

There is no minimal or maximum experience required to garnish these valuable skills.And they are equally significant as having sound financial market knowledge.The procedure to acquire these skills is very sore for most of the market players, but once these skills are honed, you are nearer to achieving your financial goals.

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