Take this message to heart! It’s sad that these 3 basic Investing mistakes that’ll wipe out most young traders each year. Just knowing this fact on knowing what not to do is not enough. Investing is about kaizen, the art of continuous improvement and surviving each trading fall to live another day. It’s an art of trading, few can excel. It’s tough on the trading mind, pockets and ego enabling successful traders to bet, and lose money more times yet still make money. Because they lose little during losing trades and makes big money during winning trades.
The first biggest mistake is not having a trading plan.
It means loser traders follow tips without due diligence, rely on self-gut confidence and past notion about how the market behaves depend on them doing certain things.
The 2nd biggest mistake is having not trading rules.
Especially not having an exit strategy and even if you need to be shot in order to pull the trigger. Many a trader loses big money during sharp stock market reversals either frozen in thoughts or unable to cut losses. Whether fearing the market will reverse upwards or having an emotional attachment to the stocks.
The 3rd biggest mistake is not having a sure-making money formula.
It might be investing in fixed yielding bonds, FD, CDs, Treasure bills. It does not mean any formula but a formula you will stick to, analyse, research, test thru paper trading and know in your head and is the compass you will follow in times of up-trends, downtrends and in times of uncertainty. This is an interesting topic, will definitely touched upon again. Remember if you don’t have a money making formula it’s because you ain’t got one and you’ll better start looking for one. It might not be in stocks.
Take this time to look first at yourself. Don’t invest in stock unless you first invest in yourself. Have you spent enough time and money to educate yourself in the art of trading? 50% of traders have not bought a single book on trading let alone read one! Isn’t it natural that these traders are wiped out each year? Have you taken a deep look into the psychology of trading? Knowledge is not enough in stock trading because if it is so, then university professors and engineers will be driving Masseratis and BMWs. It’s about learning about our own inner self, having to control our greed and fear to be effective, and balancing our time, money and expenses.
There is no one specific Trading course that works for anyone. It’s a combination of skills, experience, discipline and a good memory and having the guts to practice what one believes is true, surviving shark baits and losing small money a lot of times before getting the hang of this Holy Grail of trading. Any good books, especially the Amazon books listed here is good start of the greatest journey of our life. If not forget trading stocks, go fishing or catch a movie.
Suffice to say, sadly there are no shortcuts here. Paying to learn and undergoing real roller-coaster experiences, both in losing and winning are necessary. But remember we don’t want to end up like the dinosaurs because we have no time to recover from a disaster. Start now and start small.
Happy kaizen trading!