Trading can be a challenge, but it is especially risky. Successful investors and traders agree that the mistake is part of learning. However, you should not repeat the mistakes made by others. We can all learn from mistakes.
Here are four mistakes you should avoid in the stock market for a successful trading career.
- Using margin
As a new investor, you should never be drawn to what is presented as free money. A margin is the money given by your broker as credit. Without trading experience, buying on margin could lead to unnecessary debt. It remains to buy shares using your capital, which puts you in the risk profile that capital allows you. That way, even if your positions don’t give up, you end up living to trade another day. When your investments all flop and you bought them using the margin, you land in debt in addition to losing capital.
- Following actions
A wise investment involves buying a stock at the right stock prices and selling when the price reaches the desired point or when the loss cannot be sustained. Tracking the sock involves trying to complete an order by bidding successively as the rice moves. This is a reactionary offer and you may lose your focus following an order, without being strategic about the risks and leverage you have. Avoid this at all costs. Buy at the right time and withdraw at the right time. Don’t run.
- Don’t hope
Trading is about speculation, but don’t be fooled by the fact that it’s a game of hope and prayer for actions to turn in your favor. So don’t hope. Instead, make strategies based on philosophical and logical analysis of market conditions. This is the only way you will remain objective in selecting positions and making calls.
Buying shares in the hope of selling them profitably requires more than hope.
Discipline is needed to adhere to your strategy and perform performance analysis to determine how each transaction was conducted, lessons learned, and your profit and loss from our portfolio.
This can be determined by performing a post-trade analysis.
- Underestimating yourself
Most investors, especially beginners, have been scared to the point where they think less of themselves when it comes to market excellence. The success was somehow reserved for sophisticated investors with years of experience. But don’t be fooled. Beginners can also be successful; it does not have to come after years of trading. However, it also depends on how you define success. For a beginner, success should involve mastering a strategy that returns you between $ 100 and $ 150 after two days. It’s about making a profit from your capital. And as you get used to trading, your capital also grows in line with risk tolerance. This is the definition of success. So don’t underestimate your skills and potential to be a successful investor.