4 Mistakes to Avoid in the Stock Market


Trading can be difficult, but above all risky. Successful investors and traders alike agree that making mistakes is part of learning. However, you don't have to 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 career in trading.

  1. Use the margin

As a new investor, you should never be attracted to what is touted as free money. A margin is money that your broker offers you in the form of credit. Without experience in trading, buying on margin could result in unnecessary debt. Stick to buying stocks using your capital, which places you in the risk profile that your capital allows you. In this way, even if your positions do not give up, you can live to trade another day. When all your investments fail and you bought them with a margin, you go into debt and lose your capital.

  1. Hunt stocks

A wise investment involves buying a stock at the right stock prices and selling when the price reaches your desired point or when the loss cannot be lasting. To chase the sock, you must try to fill an order by bidding successively as the rice moves. This is a reactionary auction, and you risk losing your focus on pursuing an order without being strategic about the risks and leverage that you hold. Avoid this at all costs. Buy at the right time and retire at the strategic time. Do not continue.

  1. Don't hope

Trading is a matter of speculation, but make no mistake: it is a game of hope and prayer for stocks to turn in your favor. So don't hope. Instead, develop a strategy based on a philosophical and logical analysis of market conditions. This is the only way for you to be objective in selecting your positions and making calls.

Buying stocks in the hope of selling them at a profit requires more than hope.

It takes discipline to stay true to your strategy and perform a performance analysis to determine how each transaction has worked, lessons learned and your profits and losses against our portfolio.

This can be determined by performing a post-trade analysis.

  1. You underestimate yourself

Most investors, especially newbies, have been scared to the point where they think less about themselves when it comes to excelling in the market. Success has been somewhat reserved for sophisticated investors with years of experience. But make no mistake about it. Beginners can also succeed; it doesn't have to come after years of trading. However, it also depends on how you define success. For a beginner, success should involve mastery of a strategy that switches your $ 100 to $ 150 after two days. It's about getting your capital back. And as you get used to trading, your capital also increases according to your risk tolerance. This is the definition of success. So don't underestimate your abilities and your potential to be a successful investor.

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