How Successful Traders Make Consistent Gains

They’ve done it again! Whenever we hear about blue whale investors making it big at the stock market, we can’t help but wonder, “How do they do it?” Raking in big gains, one time is one thing. But how are these investors able to rack up substantial gains, time and again?

Spiking lets you follow more than 11,000 blue whale investors at the Singapore Exchange. In an article on Channel News Asia, Tang See Kit reports on how Spiking founder, Clemen Chiang, believes that access to the trades of sophisticated investors can help everyday investors understand the reasons behind every stock spiking in price, and make better investment decisions.

With this post, Spiking takes a look at what sophisticated investors overseas and right here in Singapore have to say about succeeding on the market in the long run. We’ll also take a look at what you can learn from these investors so that you can start working on becoming a consistently profitable investor yourself.

Successful Overseas

Successful stock market investors don’t just reap generous returns once, but are able to do so repeatedly. Cory Mitchell on Vantage Point Trading says a profitable trader is consistent enough to pull a regular income from the market. Investopedia says the world’s greatest investors consistently beat the market.

To see how these investors did it, let’s take a look at some of these investing greats. Learning from legendary investors provides perspective and inspiration, says Stocktrader.com, and helps everyday investors appreciate the skill involved in stock market investing. The site cites the following greats as models from whom everyday investors could learn a thing or two:

· Warren Buffet
· Jesse Livermore
· George Soros
· Benjamin Graham
· Peter Lynch
· John Templeton
· Paul Tudor Jones

Writing for Investopedia, Tim Parker says following a set of investing rules is essential for stock market investors. Those who don’t have a set a rules for themselves yet, can start by studying successful investors’ careers. He then went on to share the investing rules followed by six of the world’s top investors:

1. Dennis Gartman writes a commentary on global capital markets and is a speaker on financial networks. His Rule №1 is to let winning trades run and not to sell at the first sign of profits. Rule №2 is to get out of a losing trade quickly. The money made on winning trades will more than make up for the losses.

2. Warren Buffet, who gives financial advice to world leaders, says that when evaluating a company, look at the quality of the company and its price. If it’s a high quality company, don’t expect to buy it at a low price. If it’s not a quality company, don’t buy it just because its price is low. A good company sometimes has bad stocks; if it still looks good after you’ve done your research, go ahead and buy its shares.

3. Bill Gross manages the PIMCO Total Return Fund, one of the world’s biggest bond funds. His rule is to not be afraid of investing in an opportunity which research shows could be a real winner. While diversification (which Spiking has discussed in a previous post: https://spiking.com/blog/unity-diversity-build-diversify-portfolio/) is good, it could also lessen your profits if one of the stocks in your portfolio wins big while the others don’t.

4. Prince Alwaleed Bin Talal is the founder of the Kingdom Holding Company, who kept his cool even after the recession in 2009. This is because he is a long-term investor, holding on to stocks for extended periods and focusing on collecting dividends instead of major market events. Most of your portfolio, therefore, should be in long-term holdings.

5. Carl Icahn is a well-known corporate raider and private equity investor. His rule is to keep learning or researching. Your research, which should be based not on opinions, but on facts from trustworthy sources, should be the basis for your actions. You can take advice and verify it, but advice shouldn’t be your only reason for investing.

6. Carlos Slim is one of the world’s richest men who owns hundreds of companies. Instead of focusing on the here and now, he looks ahead and invests into what a company or an entire economy will become in the future. While looking for the next big thing, make sure your portfolio includes companies that have grown steadily over a long period of time.

To find companies with steady track records to include in your portfolio, use the Spiking app today.

Successful in Singapore

One of the most well-known and consistently profitable self-made billionaires in Singapore is Peter Lim or Lim Eng Hock (whom Spiking has featured in a sophisticated investor profile: https://spiking.com/blog/sophisticated-investor-profile-limenghock/). Francisco of Wall St. College presents lessons investors can learn from the Remisier King, the most salient of which is to be patient. Mr. Lim conducts thorough research before making long-term investments.

Mr. Lim is famous for investing in Wilmar International (which Spiking has featured in a hot investment profile: https://spiking.com/blog/hot-investment-profile-wilmar-international/) back in the 1990’s, turning a USD10 million investment into USD1.5 billion. He advises investors not to celebrate too much when their stocks go up, and not to get too downhearted when they go down. Investors might be better off with their money in the bank, he says, if they lose sleep over the fluctuations of their stocks.

Other lessons to be learned from Singapore’s self-made millionaires come from Jeff Sun, who reveals their investing and other general habits on SingaporeStocksTrading.com:

1. Having multiple sources of income. Additional sources include stock market investments and real estate investment trusts (which Spiking has also discussed in a previous post: https://spiking.com/blog/discover-securities-sgx-reits/), as well as property rentals and part ownership in businesses.

2. Setting dreams before setting goals. Very simply, this means figuring out what you want, and then figuring out the steps to achieve it. First ask yourself what you would need to do to make your dream come true. Then ask yourself whether you are capable of doing it.

3. Not wasting time. Time is just as much an investment as money — but where lost money can always be regained, lost time is gone forever. Time should be invested in activities that pay dividends later on in terms of financial security or the realisation of your dreams.

4. Having a mentor. 93% of the self-made millionaires in Mr. Sun’s study said their mentors made it possible for them to become wealthy, while 68% said mentoring was key to their success. Mentors who teach you what and what not to do based on their experience can be invaluable.

5. Not quitting. Most self-made millionaires had to pick themselves up from at least one failure. Perseverance in the face of several obstacles is what makes successful people stand out. Just keep on trying until you find what works for you.

Successful with Spiking

Just as Mr. Icahn says, smart investors should base their trading activities on facts from trustworthy sources. Spiking helps investors do just that, by providing verified, real-time information from the SGX as well as major stock exchanges in Australia and Southeast Asia. This information includes the buying and selling activities of sophisticated investors, as well as the performance and major shareholders of listed companies.

Keep track of this information and start becoming a more consistently profitable investor with the Spiking app today. Download the Spiking app from iTunes and Google Play to earn your very own limited Pioneer Member badge. For more details, visit the Spiking app homepage now.

Sources:

http://www.investopedia.com/articles/financial-theory/11/6-lessons-top-6-investors.asp
http://www.investorguide.com/article/6679/15-characteristics-of-highly-successful-investors/
http://singaporestockstrading.com/2015/06/07/5-secret-habits-of-self-made-millionaires-in-singapore/
http://www.wallstcollege.com/7-lessons-from-self-made-billionaire-peter-lim/
http://www.channelnewsasia.com/news/singapore/want-to-trade-like-the-big-boys-this-homegrown-app-could-help/3150020.html?cid=FBia
https://vantagepointtrading.com/archives/13591
http://www.investopedia.com/slide-show/worlds-greatest-investors/