THE BIGGEST MISTAKES NEW TRADERS AND INVESTORS MAKE

 

Most beginnmistakes new traders makeer traders and investors in the stock market lose part or even all of their invested capital in the markets. Though the reasons why this happens has been analyzed again and again; newbies in this market continue to experience these difficulties. Though this could be attributed to ignorance or lack of knowledge, it could be that the psychology of new traders is exploited by the market dynamics.
For instance, they may get fascinated by the possibilities of profit the market provides and hence look to book profits quickly. Such frequency in trading can result to the newbie trader or investor falling into market traps easily.

Let us explore some of the mistakes new traders make.
1. Not cutting their losses in time; we have always heard of the phrase; “Cut your losses quickly and let your profits run”. Though this is repeated over and over, new traders continue falling short of doing that by the mere excitement of booking some profits early. They are also not prepared to take a loss and usually wait for the market to turn around and head to their direction. Markets trend and their loosing position quickly consume their capital and also hold margin that could have used to place other trades.

2. High Leverage; most new traders approach the market from a ‘get rich quick’ perspective. This leads to high use of leverage in order to win big. Though this is possible, leverage also amplifies the losing side. Hence a number of consecutive losing trades will wipe out their trading capital.

3. Over-trading; experienced traders and investors always advice newbies to take trading as a business and not a hobby. However, the excitement of trading influences the habits of new traders easily. This makes them place numerous trades and watch several unrelated markets at the same time. More often than not, their mindset and trading approach becomes overstretched rendering them inefficient in trading.

4. Relying on others; new traders often follow the so called “trading gurus”. This ranges from following major online financial analysts to social media. By doing this, they abandon they trading plan and approach leading to inconsistency in their results and finally losses.

5. Lack of a trading plan; discipline is a major trait that successful traders possess. They create a trading plan based on their trading strategy and stick to it leading to consistency in their trading. They are also able to track their mistakes from the trading plan and correct accordingly. On the other hand, new traders do not keep a trading plan and end up moving from strategy to strategy and following others as discussed in mistake 4.

6. Adding into losing positions; new traders double their losing positions in the hope of getting a breakeven. This is disastrous especially in a trending market. If the market continues to move against their positions they end up with huge losses and the risk of losing their entire capital.

7. Slacking in acquiring more skill; experienced traders reached their level by working hard and acquiring more skills to survive and make profits from the market. On the other hand, new traders think that making money from the market is easy and rarely put enough effort till it is too late.

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  1. Commented by: ScottENEMY

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    COSC Validation and its Strict Criteria
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  2. Commented by: ScottENEMY

    주식신용
    로드스탁과 레버리지 방식의 스탁: 투자의 참신한 영역

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    레버리지의 장점과 위험성
    레버리지 방식의 스탁은 상당한 수익을 제공하지만, 그만큼 상당한 위험성 따릅니다. 주식 시장의 변동은 예상이 힘들기 때문에, 레버리지 사용을 이용할 때는 늘 장터 동향을 세심하게 주시하고, 손실을 최소화하기 위해 수 있는 계획을 마련해야 합니다.

    결론: 조심스러운 고르기가 요구됩니다
    로드스탁을 통해 공급하는 레버리지 방식의 스탁은 강력한 투자 도구이며, 적당히 이용하면 큰 수입을 제공할 수 있습니다. 그러나 상당한 위험성도 생각해 봐야 하며, 투자 선택은 필요한 사실과 조심스러운 생각 후에 진행되어야 합니다. 투자자 자신의 재정 상황, 위험을 감수하는 능력, 그리고 시장의 상황을 반영한 균형 잡힌 투자 전략이 중요합니다.

  3. Commented by: ScottENEMY

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