Avoid Mistakes While Trading

By Author: Bruce Parker
Total Articles: 9
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Trading mistakes happen to each and every one of us. You might have heard the phrase “Stock markets are a guaranteed way of making profits/money.” But how can someone say this and is it really true? This is a question on everyone’s mind. Easy – all a person has to do is to invest in a good stock and hold it for a long term. No person following this would have ever lost money over a period of 10-20 years. Now just go and find the person who has done that. Maybe 10-15% of the people would have done that rest 85 – 90% would have ended up losing money.

How does this happen? Primarily because they fall into the same old fashion of emotional trauma of “Buying High and Selling Low.” A human tendency of always being a winner is also the reason for the same. At the most euphoric time of the bull market they end up buying stocks and in the most painful times (generally the end of bear markets) people end up selling stocks and losing money out of frustration. In fact after their sell-off, it could be the last leg of a bear market and a start of a new bull market. These are certain things you need to keep in mind while ...
... online share trading.

Fear is a stronger emotion than greed

The torture of losing money over a period of time (week, month, and year) could even wear down the most determined trader. The threshold of level of a common or average investor is much lower than a determined buyer. Moreover people even end up losing money in a very strong and prominent bull market.

Online share trading mistakes to avoid

Some of the common mistakes traders do:

Not ready to take losses
Bottom fishing
Over betting a sector / stock
Averaging down
Falling in love with the stock
Blindly following
Over trading
Panic a lot and being impatient
Relying on others
Overconfidence
Trading without any plans and changing very often
“Get Rich Over-Night” thinking
High ego
HOPE – WISH – FEAR – PRAY cycle
Day dreaming on profits
Lack of focus
Not being open to new ideas

Qualities that make a good trader

Let us find some rules / ways of becoming a better day trader or investor in the market:

Independent thinkers
Strong analysts
Active learners
Handy with many tools of the trade

An informed trader or investor will generally be a profit-maker. Staying informed about different types of strategies, analysis is crucial. Most importantly he is able to learn from his trading mistakes. Trust your research without going over confident and that will pay off.

Following these kinds of some rules and not repeating these trading mistakes would put you in a different position. It would put you in a profitable position during these challenging and ever-changing markets that can be rewarding.

Happy online share trading!

About Author:

Bruce Parker is a trading analyst, empowering individual investors to make better investment decisions. He provides industry's best finance decisions on unlimited trading, zero brokerage services on equity, online share trading and currency derivatives (futures and options). For more information on online trading india, you can also visit www.rksv.in.