If you are planning to enter into the world of stock market without any knowledge then that’s your first mistake. All the successful people in trading have some traits in common such as, they tend to take a rational decision immediately even under an immense pressure without losing their cool.
It’s a human nature to make a mistake but not to learn from it is another mistake.
So, here are some of The Most Common Trading Mistakes to Stop Making in 2018 for you:
- Investment without a Goal:
An investment made without any goal is like shooting an arrow in the sky. A healthy investment includes a specified motive or a goal to achieve. A motive can be for retirement and education of children or short terms goals like vacation.
A goal helps the investor to clearly plan on a strategy like what type of securities to invest in, how long to invest, and how much to invest to achieve a target return.
- Following the market trend:
Many investors seem to make decisions according to the market trend they read on financial news. The financial news is not always a reliable factor for investor because sometimes they might just be a hoax which will certainly result in a bad investment.
Always remember to do research and confirmthe trend before believing in it and investing blindly only to lose money.
- Unknown to Portfolio diversification:
An investment portfolio is the diversificationofinvestor risk tolerance and their investing objectives. It helps investors in minimizing the losses and maximizing the returns. Portfolio doesn’t exactly fend off the risk and act as shield of Achilles. But having it ensures the low risk. It is a most important for an investor to create a portfolio.
A few liquid asset and securities is vital to have in a portfolio to avoid a broke situation.
- At the mercy of investment manager:
A trust on investment manager is good thing because he is professional in his field. But human have tendency for the error too. So, do not fully depend on your manager for an investment or you might end up enduring loss.
Its always better to do a little research on your own before investment.
- High performance securities:
Securities are not always going to perform excellent in future as well based on past record. It’s important to track the performance of share in regards to its profit/ loss statement, balance sheet, and cash flow statement. At last confirm the utilization of the fund raised by the company. In short, avoid gambling on investment.
- Selling stock so soon
Investor seems to sell their stock when the prices are falling and end up in loss. Sometimes having a little patient and a little trust might work magic soon like what goes down rises up too. So, have a thorough analysis before taking such decision in such situation.
- Imitating the moves of other investors
Many investors seem to imitate other investors in what security they are dealing with because the combination seems to be working for them. Just because its working for them doesn’t mean it will work for you too as the ratio within the combination, i.e. the no. of security per company, may differ completely.
- Trading way over
It is a misconception that an investor trades a lot. In real world every smart tradertrade in a minimal trade to avoid the extra fees and to be able to diversify the risk.
There are many other small mistakes like getting greedy of profit, making short term investment thinking it’s better than long term investment etc. Hence, the best thing you can do to avoid these mistakes and confusion is self-study and research. The more you educate yourself about trading, the more is the chance of avoiding any mistakes.
If you want to start trading then you can start by yourself or you can take help of any advisory company. Generally I prefer BAZAAR TRADING, form their advice I earn bigger profit, they provide the best technical and fundamental analysis in stock trading and commodity from experts.