Why are your predictions not working?

The first mistake is an overly emotional approach to investing. Imagine that you invest 10,000 zł in the stock market, based on a hunch that a particular security will rise. Meanwhile, the market declines, and you lose 10%, which means a loss of 1,000 zł. The next mistake is ignoring slippage. For example, you plan to buy shares at 100 zł, but the price at the time of purchase rises to 103 zł, which costs you an additional 300 zł for 100 shares. The last mistake is a lack of proper stop order management. Imagine that you set a stop loss at 95 zł, but the market is too volatile, and the stop is not filled. You lose an additional 500 zł before the order finally activates.

These problems arise from the fact that the market operates like a large, unpredictable machine that does not listen to our opinions or emotions. Price movements are determined by countless factors that we cannot control. Our intuitions and speculations have no impact on market reality. Ignoring elements such as slippage or spread means that our strategy is burdened with greater risk, and investment decisions become more of a gamble than a well-thought-out strategy.

Assume that your initial balance is 15,000 PLN. Due to emotions and improper order management, you lose 10% on one transaction, which means a loss of 1,500 PLN. An additional 300 PLN is lost due to slippage, and the lack of an effective stop loss adds another 500 PLN in losses. In total, this means a loss of 2,300 PLN, which constitutes almost 15% of your capital. Such an approach not only drains your account but also discourages further investing.

Here are a few steps worth implementing to minimize the risk of losses:

• Risk management: Always set a maximum loss level that you are willing to accept.
• Developing an investment plan: Create strategies based on data, not emotions.
• Market monitoring: Stay updated with market events that may affect your investments.
• Using stop loss orders: Set realistic stop loss levels to protect your investments from larger losses.
• Meticulous approach to slippage and spread: Take these factors into account in your investment strategies.

Daily review your trades and analyze what you could have done better.