Many novices and emerging stock traders go all out for markets with high profit assumption, but soon discover that continuing to make money is not as easy as they a wait mutual stocks.
For some people, this feeling can be frustrating, especially since there are some areas that promote human emotion, such as business. The prospect of making money usually attracts people into the trading arena, but losing money can be a daunting task.
Investment is gradually becoming an alternative to bank deposits, and many novice investors seek advice from experienced investors. The main question they asked (probably the most difficult question) was: "Where to start?"
Here, we have listed 5 mistakes that novice stock traders should not make.
Trading without a plan
The vast majority of novice traders can start stock trading without planning. Whether you want to make money on the exchange on a regular basis, or want to obtain a source of passive income, developing a trading plan will play an important role. Otherwise, investment and speculation will become unprofitable gambling.
The only exception you can do if you don’t have a plan is to use a ready-made investment portfolio or the services of a financial advisor. In this case, you will follow the investment strategy that has been developed, so errors will be minimized. However, to gain the independence of the securities market, the first thing you need is a trading plan. Among them, traders captured the following key points:
Preferred trading method: scalping, same-day trading (same-day trading), liquidation trading (possible holding positions for several days) or long-term investment;
Analysis method: technology or basis;
Choose a trading platform
Risk management : Determine the maximum risk of each transaction, the allowable withdrawal of monthly deposits, and the ratio of profit to risk of a position;
The rules and other aspects of entering the industry.
Following a trading plan allows you to trade systematically and intentionally. Over time, skills will improve, thereby increasing transaction efficiency. You will learn to understand whether you have made a mistake or market behavior is different from most situations.