The three mistakes everyone makes when trading in stocks

Dreaming big is not the problem, bad execution is:

I was only in my early twenties when I was chosen for a job in a big corporate where I was to derive a big monthly remuneration package. This was also the first time that I was going to have so much money at my disposal. I was still to fly the nest and so there was nothing really that I had to invest in or worry about any expenditure. That left me with the doubt as to what I would do with all the money accumulating in the account.

Surely, didn’t want it to sit too long there:

I always considered myself to be the guy who is good with numbers and that I had an analytical mind and here when confronted with the practical possibility of using up a fund I was at crossroads trying to decipher what is the best way to let the money work for me.

Stock market beckoned!

There was a stock that I was following for a long time, even while at college and had mentally noted to myself long ago that one day when I had sufficient funds I would unhesitatingly invest in stocks. Now was the time to make that dream into a reality. I hooked up my account with a de-mat account that would let me trade at the stock market online.

Now, the three mistakes that everyone makes in the stock market were also committed by me. What are they?

  1. Focusing too much on technicalities:

 

Share market honchos do not attribute their success to the knowledge that they have. Instead a lot many of them feel that it is only 10 percent of the contributor to the success there. Acquiring knowledge is good but not to the extent of reading more than is required!

 

  1. Swimming against the trend:

 

This is not the smartest thing to do. There is a certain kick that comes in when you try to not follow the trend. For example, if the markets are rising, you are busy preparing for its downward spiral and predicting that it will come crashing down soon! This does not at all help in the long run and it can add a bag full of disappointments to you.

 

  1. Not managing risks:

 

Losing money at trading is not bad really. What is bad is the casual approach that traders have at losing money. At no point in time can you be casual about losing more money than you can afford to lose. At that moment probably you do not realize the corrosive effect that it has on your total capital but slowly and surely it will eat up into your investments and not leave you with the best of taste.

 

Be a smart trader to be a happy trader!