Realistic Expectations: To foster the proper investment attitude, you must set realistic expectations regarding both the timeframe and the returns of your investments. Do not expect to become a millionaire in a few months with only a few or a dozen thousand at your disposal—the sooner you ground your expectations in reality, the sooner you will begin to enjoy regular success. Recklessly employing excessive leverage might work temporarily, but sooner or later it will lead to losses. Match your expectations with the size of your capital and your own capabilities. For instance, savings accounts yield around 4% per year, real estate investments offer approximately 8–15% annually, and the best investment funds yield about 20–30% per year. With a well-crafted, rational portfolio, you can realistically aim for at least a 40% annual return.

Invest Only Surplus Funds: Surplus funds are those you do not need for everyday living expenses or other planned costs. If you do not have such extra money, avoid borrowing it—steer clear of financial investments and instead invest in yourself, particularly in learning and skill development. Always assume that the money used for investments could be lost. If you feel undaunted by this prospect, you may start investing—but be honest with yourself. Investing money you cannot afford to lose will only generate immense psychological pressure and inevitable losses.

Peaceful Sleep: If you find yourself losing sleep, worrying about your open positions at night, it means your risk is too high (considering the size of your investments and the leverage applied relative to market volatility). Adjust the risk level for each transaction to match your skills and risk tolerance. A good rule of thumb is to divide your daytime risk tolerance by two or three to ensure you sleep soundly at night.

Every Transaction Is a Battle: It is crucial to prepare for each new transaction using a tried-and-true method and not let the outcome of the previous trade influence your next move. Avoid both the euphoria or overconfidence following a rapid, significant profit and the temptation to “make up” for a loss when something goes wrong. Refrain from risking more than usual simply because you’ve had several good trades in a row. Likewise, do not open a new position out of a desire for revenge or to prove the market wrong. Such emotions cloud rational judgment—if they arise, take a step back.

Do Not Get Attached to Transactions: Do not view each trade as a personal triumph or failure, as there are often factors beyond your control. When you avoid risking too much in a single trade, you have no reason to become emotionally attached to it, thereby maintaining objectivity. Not every transaction will yield immediate profit. Many investors, after starting out, slip into wishful thinking—”it will climb further,” “it won’t drop any more,” “it’s about to reverse,” etc.—or even more commanding thoughts such as, “grow/drop already!” Such wishful thinking is a dangerous signal; it’s wise to hedge such a position and take a break from trading until you regain clarity.

Patience: Learn to cultivate patience—it will prevent you from entering or exiting the market too hastily (markets tend to remain irrational longer than most expect). Wait for your opportunity, as defined by your investment model, and resist the urge to contort the model to suit temporary market fluctuations; doing so only leads to more, lower-quality trades. Patience builds a sense of control over risk and reinforces positive investment habits. Remember, patience is not synonymous with inaction at the right moment.

Planning: Plan your investments carefully before you make any decisions. Calculate the risk and potential gain; do not act impulsively based on short-term market movements. Your perspective on the market is typically more objective before you execute a trade—allowing for more reason and less emotion. Decide beforehand what and how much you want to invest, keeping in mind any significant upcoming economic events. Define the conditions that must be met to enter an investment (for example, based on both fundamental and technical analysis), and establish a Plan B in case events take a turn for the worse. While it is impossible to predict market behavior with complete accuracy (due to too many variables), proper planning minimizes the need for improvisation and boosts your confidence in executing only well-considered trades.

Keeping a Journal: Some investors find a trading journal very helpful, while others dislike it. Recording your transactions, thoughts, and observations can be a means to achieving improved investment results. For this method to work, you must ensure that you do not repeat your mistakes or sugarcoat your losses—the paper is patient and will faithfully record whatever you write. For some, however, creating charts, tables, and keeping daily notes can be a distraction from sound, strategic planning.

Heed Your Doubts: If you have significant doubts about a planned trade, the method you’re using to determine risk, or the process for choosing entry and exit points—or if something simply feels off—don’t proceed with the trade. Invest only when you are almost certain that the opportunity has a high chance of success. Not every trade will turn out as expected, but at the point of entering an investment, you must feel confident that it’s the right move.

Gambling: In English, the term often implies danger or risk. Another definition pertains to any money game where the outcome is determined by chance. The word “hazard” comes from the Arabic “az-zahr,” meaning a dice game. Gambling can be addictive; pathological gambling is a disorder of habits and impulse control. Opening large positions based solely on emotion is akin to gambling. In contrast, investing is an art—a combination of the ability to predict price movements, manage risk, and control one’s emotions (or mindset). A patient, well-planned approach to investing has nothing in common with the colloquial meaning of gambling, which involves exposing oneself to unnecessary, uncontrollable risk.