Not only the beginner but the experienced trader makes the mistake. They have roughly 75: 25 ratios, which mean that their decision is 75 percent right and 25 percent incorrect. This ratio is bearable. Trading is a risky matter; even the experienced player may suffer a loss.
What about the enthusiastic beginners? They enter the market thinking, they double the money in a short time, but most of the time they lose their money. What’s the outcome? Many are frustrated and give up. If you want to be a professional trader, avoid these mistakes.
Many enter the trade market with the assumption that the price will shoot up, but this rarely happens. Price may rise initially, like in the case of IPO, but later they may keep on reducing.
The beginners will hold the stocks waiting for the price to increase, and later they left with bag-holding. It is very important to timely exit the market, no matter whether you are making the loss or profit to escape the detrimental situation.
Entering the market without the plan:
Many “talented” people enter the market, without having the proper plan. Ask yourself before entering the market:
- How much money do they want to invest?
- How much loss they can bear?
- What strategies to follow, in case the trade is not working in favor?
So next time you want to invest your money, find answers to these questions to better sustain in the market.
Even if you are trading five or six times in a month, keep a record of every trading. People simply move to the next trade, not analyzing the first trade. Take a screenshot of every trade you did – a profit or loss.
Before proceeding further, analyze it where you make an incorrect move, or how you make the profit. These will help you to learn from your mistakes, improving your performance.
Do you think the stock promoter help to raise your funds? Many are genuine but don’t fall prey to them. There are many cases where they sell their stocks to beginners, draining their accounts, and making a profit from their account.
Better take the guidance from the professionals like Matt Choi and others. Matt Choi, founder of Certus Trading a trading education company that helps both new and experienced traders to help them learn new strategies and navigate their way around the stock market.
Bulk position size:
Many beginners will rush to invest their money in one trade; they end up buying a large number of a single stock, never do this mistake. Trade markets run on judgmental skills and risk-management.
Start by investing less and in different stocks to reduce the risk of loss. Know your strategies and skills before full-fledge entering the market.