All financial investments have risks; this much is true. About ninety percent of people who go into trading will end up losing money. So what is it exactly that you’re doing wrong? Simply put, these people do not have a good perspective of the situation. In a way, going into investments is kind of like playing poker.

The game of poker is a good simulation of how the investing world works, and my theory is thusly: The correct strategies in winning or getting to the end at least, are similar in both cases. This may sound nontraditional, I admit, but just hear me out with this.

You will not get very far when playing poker, if you just hold back and wait for the right hand to invest all your chips in that one single hand. One, even the best hands have a level of risk in it, so you may still end up losing all your chips at the end. Another thing, if you go in, with guns ablaze, you’ll still only end up with a small yield of extra chips.

Betting like mad on every single hand is not a very brilliant move, either. Do this and you’ll probably end up being playing the fool. If you constantly expose your chips to high risk, it’ll only lead to a sudden burnout; you’ll be out of the game before anyone else, steadily losing all of your chips in a few rounds.

So what is the right way to play poker? As anyone playing will learn quickly, getting ahead in poker involves more than just considering your own hand and chips, but getting a good feel for the hand and chips of those around you as well. Once you get a good feel of the game table, also know that you can’t put all your chips in one really good hand. Invest your chips little by little, spreading out your game to those of good, but not necessarily great plays.

In conclusion, these same principles will apply to trading. The game table is the market, and how it affects your investments. You’ll also avoid having all of your capital on one investment; if it is spread out in many decent deals, then if one crashes, it wouldn’t be as devastating.