Sunday, February 13, 2011

High Risk High Reward investment strategies

                   It is a common perception that if you are ready to take high risks, then you will have more probabilities of receiving high rewards. But there are several investment strategies which allow you to receive massive benefits without the need to take too many risks. When we analyze the high risk high reward investment strategies, we have to keep in mind these should not be your main investment strategies, but only one of them. 

                  Basically, high risk high reward investment strategies are those which have the potential to win or loose a big amount of money for you. If a transaction involves the risk of loosing only $500, then you will probably be ready to take the challenge but if it involves loosing $50,000, then you will definitely refrain from investing in such a transaction. The basic thing is that you should look at the profit or loss percentage while investing, rather than the number of dollars involved.

                  This will make you look at the market in relation to actual value of trade. If you look at the percentages of losses and gains in an investment, then you will make much clearer decisions. The ultimate aim should be to keep the numbers stacking up, whether it is a small or a big trade.

                 One of the best things about looking at the percentages is that it will stop you from getting emotionally attached with the losses and profits. In this way, you will not feel discouraged if you suffer loss and you will not be swayed with the feeling of spending extravagantly if you gain.
                 

                Giving attention to the percentage is very important, especially if you suffered loss in the stock market. If you are a beginner, you will probably start feeling that you will never invest in this market again. Using percentages will keep you away from this kind of mindset and make you analyze your gains and profits without using much of your emotional state.

                While using high risk high reward investment strategies, you should give consideration to all the pros and cons of the investments. After all, you are trading, not gambling, and therefore, do your best to increase your investment profits. In a game, you can afford to suffer some losses because you are playing for the sake of fun. But investing in the stock market is not a game and therefore, you have to use your strategies wisely.

0 comments:

Post a Comment