Trading is like nothing else. Yet some of the main things you would do in life to take care of yourself also applies in your trading career. I am guilty of violating some of these stuff on the list, sometimes I overtrade, minsan bobombahin ko yun stock.
Its normal, but what is important for us is alam dapat natin pag mali na ang ginagawa natin para pwede na natin iwasan. In english, we have to be aware of what is happening, so we can correct and avoid them right away.
Here are 10 common errors that traders make when they start out, and a few tips to avoid them.
Don’t think you are the best just because you are in a hot steak. Stocks behave according to principles that far outdate you or me. Always double-check trades, make sure you do proper and complete research about your stocks. Study the stock itself and make a checklist for qualifications the stock needs to meet to make it a good fit for you.
2. Being Too Slow
There is having an idea, and then there is actually going through with it. Don’t be complacent, tentative, timid, or too conservative. Execute the trades according to your strategy, huwag yun puro “sana nabili ko ito, sana na nabenta ko…” Trust your plan!
3. Failure to Manage Risk Properly
Don’t get your head wrapped up in a stock that you believe in. Always trust the price action, and never fall in love with a stock.
4. Listening to Wrong Advice
Most commonly this comes from so-called “guru” traders. These traders pretend to teach, but often they have their own selfish agendas. Beware of this.
Be careful not to blow out your account by using too much leverage and eventually end up to a margin call. If your stock does not perform once it is leveraged sell it immediately to avoid bigger losses and interest fees.
6. Failing to see the Big Picture
Everyone pulls liquidity into the market, but you have to maintain that liquidity by putting it in the right place and investing your hard-earned money wisely in value stocks.
7. Not Being Vigilant: in trades
You should always watch for signs that if a stock is going to go down, so you have to do what you need to do to get in and out of trades by unwinding your position effectively but never panic!
8. Inability to Deal with Failure
If a stock doesn’t go your way, don’t panic or double down or chase it in any way. Just hit the pause button, take a moment to regroup, and assess the situation fully and properly with a measured approach.
9. Bad Diet
Drink plenty of water, don’t skip out on meals. Don’t drink too much coffee and don’t party too much. A trader needs to manage their diet the way any healthy person would in order to have the proper state of mind for trading and thinking on their feet.
avoid stress through exercise and getting proper sleep. And in your off hours, don’t agonize about trades, or what could have been. Just think about learning from the past by focusing on the future.