Read post I: 10 Big Mistakes that Beginner Stock Traders Often Make - Part I. This post is a continuation of Post I, where in post I, I have written 4 (the first four points of mistakes that stock traders often make. In Part II the post In this case, I will discuss the next 5 points:
6. Don't have a trading plan
Not having a trading plan is something very dangerous. Beginners often do not know what to do after buying a stock. At what price do you want to sell? What price do you want to cut loss at? Beginner traders often don't have this kind of planning after buying a stock.
Not having a trading plan can lead novice traders to be tempted to buy junk stocks or fried stocks. Not having a trading plan makes trading activities chaotic, disoriented and plunges novice traders into bigger losses. Also read: Traits of Traders Who Don't Have a Trading Plan.
7. Undisciplined
Beginner traders sometimes already have a trading plan, but they are not disciplined to run it. Why does this happen so often? Because beginners are still unstable in managing their trading emotions. This is very reasonable. However, if you have not been able to discipline you must immediately correct your mistakes.
The solution: you just need to practice. Over time, you will definitely find it easier to discipline yourself when you learn a lot about stock price fluctuations.
8. gambling
The popular term is gambling. Yes, novice stock players often speculate when choosing which stocks to buy. This is more because beginners do not know how to buy the right stocks. Beginners are also easily tempted by big profits, so they tend to target tier 3 stocks which I really don't recommend for beginners.
Also read: Stock Trading: Between Analysis and Gambling? - Part I and Stock Trading: Between Analysis and Gambling? - Part II.
My advice: It's a good idea to start playing stocks if you at least understand how to buy and sell stocks correctly. This means, at least you can read the indicators, bid-offers, and understand the stock category. Also read: Understanding Tier One, Layer Two and Three Stocks
9. Like to lose, afraid of profit
Many novice traders like to hold on to losing stocks for too long. Don't want to cut loss at the beginning. When stocks continue to fall, traders finally give up and cut losses. This means that the losses they have received are much greater. Try if the trader cut loss at the beginning, the losses suffered will be much smaller. On the other hand, when stock prices go up, traders quickly realize profits.
You have to change this understanding. If the stock you buy continues to fall, you must immediately take a cut loss step. On the other hand, if the stock price goes up slightly, don't sell immediately. Buy stocks whose prices are rising or rebounding.
Do not buy stocks that are not technically or fundamentally clear. The principle: Cut your losses short and let your profit run.
10. Not taking rest time
Beginner traders often have the assumption: The more often you trade, the greater the chance of making a profit. This is not true. You need cooling down time, both when you have made a big profit, or when you are experiencing a loss.
This is precisely aimed at minimizing the risk of loss, as well as calming your psychology. Believe me, by taking a break, your trading decisions in the future will be of higher quality. Also read: Best Time to Stop Trading Stocks
Okay, that's the 10 big mistakes that most beginner traders make. Every beginner will experience these mistakes. The difference between successful traders and unsuccessful traders is their ability to analyze trading weaknesses.
One more important thing is their willingness to change the trading style that has been wrong so far. Also read: Steps to Build a Successful Trading Mindset.
