Are you someone who wants to start a passive income source? Or want to start a full-time career in Trading?
So, here are 5 trading mistakes that most traders make (you should avoid):
Not knowing your trading style:
Why do you want to trade? Do you want to make some quick bucks and sell your positions, or do you want to invest your money for an extended period?
There are many trading styles like Intraday, swing trading & long term investment. Every style needs a different type of mindset and strategy. For a long term investment, a person has to look for the fundamentals of the companies, whereas in intraday, you should have a good knowledge of indicators, technical analysis. So before entering the market, know your style and, according to that style, make your strategies.
Jumping in without any knowledge:
If you don’t know how to swim, will you just jump in the deepest part of the pool? In most cases, no, it can be dangerous, you may survive with sheer luck but that too for a short period only. So the stock market is also the same if you just jump in without taking good knowledge, you will lose all of your money in no time. I will suggest that if you have 10 bucks to invest in the stock market, then invest 3 or 4 bucks out of it to learn how things work in the stock market. Purchase a book or take an online course whatever you feel like. But invest that money in learning.
Listening to worthless advice:
So you are all pumped up to make your first move in the stock market, you have joined many social groups about the stock market. You have seen a message saying the stock of XYZ company can go up to the ABC amount. You trusted that advice put your money on that particular company and boom it increases 2% and falls by more than 16%. These types of scenarios are common in the stock market.
(Fun fact: Do you know you can handle the price of a penny stock with just 1 million bucks, that may sound a lot of money, but it is normal for an experienced trader). Avoid these types of situations; many people have lost a huge sum of money just because they put their money on someone’s call.
Fear of missing out (FOMO), whether you are a beginner or an experienced trader FOMO is common for everyone. Still, the only difference between a trader who makes money and a trader who loses money is discipline. A disciplined trader will not allow the FOMO to get over him/her. He/She will stick to there strategy and plan. They will wait for their turn.
Everything needs patience. This principle applies to the stock market too. You bought some shares of XYZ company; you kept your target at 5%, but as soon as you saw your share’s price going down, you panicked, and you sell your position. After some time, you see your share hitting that 5% level, you need patience in the stock market waiting too long or too short will result in loss. Don’t panic, keep patience and keep looking at your opportunities
So these are 5 mistakes that I believe a beginner trader makes. Experience comes with time. Brush up your skills and knowledge, and soon you will be able to make a fortune.
Tell us about your stock market experience in the comment section below.
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Disclaimer: The stock market is risky. The information provided here is only for information purposes and is not intended for trading purposes, advice, or to make someone invest in the stock market.
By – Tushar Wagh