Lessons that even experienced traders have learned in the last 12 months

2020 was a year unlike any other for just about everybody. The markets also felt the huge changes to the ‘new normal’ that unfolded across the past 12 months. The way we use money and the things we buy changed dramatically in a relatively short space of time. Therefore, traders had to learn to adapt to what was getting volatile, and what was starting to sink.

That’s not to say the markets have ever been easy to predict. Experienced traders will tell you that the volatile nature of the ASX sometimes makes it all that little bit more exciting! However, there are plenty of lessons we can all learn from the past year.

At least, for now, we can continue to use resources such as The Bull stocks recommendations to help guide us through. In fact, The Bull remains one of the steadiest market analysers in an ever-changing world.

Here are just a few lessons we all learned from trading in 2020.

Diversification is survival

Day traders and investors will often diversify by design. However, while the old advice ‘always diversify your portfolio’ has worn thin over the years, it became more important than ever during 2020. The fact is, even safe bets such as crude oil fell during the 12 months, meaning that more and more traders shifted towards variety in their portfolios.

Diversification in the post-COVID age, however, is likely to look markedly different compared to, say, how it looked in 2019. That said, follow traders’ leads, as many people are starting to turn their fortunes around.

Don’t hold out for perfection

Some trading experts will advise, invariably, that holding on for the ‘golden moment’ in the market is the best way to make safe money. However, post-2020, that is no longer the case. The sheer volatility of the market and the unpredictability of modern society means that waiting for that sweet spot to invest or trade is likely to be a very risky move.

Expert traders, instead, suggest that disciplining yourself, rather than waiting for chances, is the best way to succeed on the modern market.

You never know if you’ve hit rock bottom

Things can only get better: think again! 2020 was a year in which issue after issue piled up, and the marketplace really did reflect this. While we must all stay positive, trading in the past 12 months taught us that there is no ‘rock bottom.’

For that reason, we must be ready to embrace any challenges that come our way. Traders can no longer assume that they have hit the nadir of their market career. There are positive lessons we can take from this. If the markets are always going to be volatile, and if we cannot measure the ‘best’ or the ‘worst’ in any real sense, then the only thing we can do is keep moving forward.

There is nothing to say that 2021 won’t be as unpredictable as 2020. However, there is always hope, and for traders, there is always the potential for resilience.