All stock players want to achieve success in the world of trading or investing. The measure of success in playing stocks can be measured by PROFIT (profit or cash). How big and consistent profit can you get from day to day, from month to month, from year to year.
That is the measure of your success or failure in the stock market. Indeed, the size of this profit is very relative, yes, because the ability of the size of capital and the experience of each person is different from one another. Only you can measure whether you have succeeded in achieving consistent profits, and large profits or not.
But, to achieve success in the world of stocks, of course you need effort. In fact, you need to work hard. Even a reliable trader will not be able to immediately become a reliable trader. Before becoming a reliable trader, they must have experienced being a beginner, and ups and downs before becoming a reliable trader.
I met many beginners who failed in the middle of the road (even though I had not yet had time to become a reliable trader). As it turns out, there are 10 main causes that make beginner traders often fail in the middle of the road, and never fix or even don't realize their mistakes.
What are the top 10 mistakes that novice traders often make?
1. Big capital = Big profit = The ability to survive is getting stronger
The bigger the capital, the more likely you are to make a bigger profit. However, this assumption is not entirely true. Traders who do not understand much about the world of stocks are very susceptible to losses. Even pro stock players still lose. How is it possible for beginners to profit 100% on every transaction?
The problem is playing stocks with large capital (if your psychology is not strong yet), it will make your mind uneasy. Especially if the stock you buy goes down and has the potential to lose. So, no matter how much capital you use, if you don't know how to play stocks, believe me you won't be able to last long.
Solution: As a novice trader, try to play stocks with small capital first. Do not force playing stocks with large capital, let alone using capital that should be used for daily needs. Read: Minimum Trading Capital / Stock Investment
2. Pursuing perfect indicators
I often wonder, many traders are so adamant about looking for indicators that can read super accurate signals. To the extent that they bought this indicator and that's what "he said" the indicator was perfect. Who said indicators are perfect?
Because they want to be perfect, beginner traders end up using a lot of indicators which actually end up confusing them themselves. You should know that no indicator is perfect. To create a perfect indicator, you must be wise in choosing indicators. The indicator setting is not a mathematical formula.
How to do? Keep practicing to face the market, then you will know which indicators are suitable for you to apply. Read: Use Technical Analysis Wisely
3. Inconsistent trading plan
Many novice traders actually already have a trading plan. But they are fickle. Wanted to buy stock A, it turned out that he was tempted to buy stock B. Wanted to take profit at the price of 1,000, instead hoped to go up again to 1,500. Wanted to keep shares for 1 week, he ended up becoming an impromptu investor. Read: Why am I having a hard time following my trading plan?
Wanted to buy shares with 5 million, even desperate to buy with a capital of 20 million. This inconsistent trading plan will have a bad impact on your trading career. So, you as a beginner should be able to manage your trading system well. Read: Good Stock Trading Plan
4. Want to dominate the market in any condition and situation
The next mistake, traders always want to be the market leader. In fact, market conditions at that time were sluggish, unfriendly. In essence, the market is falling. This in the end only causes traders to lose themselves, stocks are stuck everywhere
Lust to pursue profit, is not something wise. You as a retail trader, believe me you can never dominate the market. You have to follow the market. When the market is bearish, don't be afraid to enter until the conditions are really stable.
When the stock price is too high, immediately realize your profit. Don't wait and expect stock prices to continue to rise. The point is, just follow the trend.
5. fear and greed
Fear and Greed are 2 things that are often experienced by novice traders. Fear when stocks go down, and greed when stocks go up. fear and greed is a common thing and all novice traders I think will definitely experience it.
However, you should be able to minimize fear and greed. Fear and greed that you are not aware of can threaten the continuity of your trading. Also read: Market Psychology: Fear And Greed and Why Stock Traders Should Have a Trading Plan?
Now you know the 5 main causes of mistakes that beginners often make. There are 5 other important points. What are these points? Please see the answer in Part II. Read: 10 Big Mistakes Beginner Stock Traders Often Make - Part II.
