The Three Worst Stock Trading Mistakes

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The Three Worst Stock Trading Mistakes

http://profitabletradingtips.com/trading-investing/the-three-worst-stock-trading-mistakes

The famous investor Warren Buffet says that the first rule of investing is not to lose money and that the second rule is not to forget the first rule. This is similar to what stock traders need to remember. The fact is that if you lose half of your trading capital on a bad trade you need to double your money and more to make it up. Remember that fees and commissions count in the business of stock trading. With the idea firmly in mind that online stock trading is a business here are our thoughts about the three worst stock trading mistakes.

Trading Based on Tips and Not Research

If there is such a thing as a sure thing in trading stocks it is probably illegal. Insider trading gets you years in Federal Prison. Trading based on stock trading tips from someone who is not an inside simply ends up in losing trades and is one of the three worst stock trading mistakes. Fundamental analysis of stocks in not limited to buy and hold investing. Trend following in day trading can be very profitable. But you need to look at trading patterns and have a basic sense of what drives the stock price besides market sentiment. Once you have a clear understanding of an evolving trend you can buy and or sell, trade options, or simply scalp for profits. One of the three worst stock trading mistakes is to assume that a trend will last forever. Keep track of what is happening during a trend, always set your trading stops, and have a strategy that alerts you as to when you should stop and reassess. If you receive a tip it may be a good one but you always need to check it out and only proceed when your own fundamental and technical analysis tells you to go ahead.

Not Following Trading Cues

Technical analysis of market price patterns is the backbone of successful day trading. You may have a very clear idea of where a stock is and where it will be due to clear changes in fundamentals. However, you still need to follow trading cues in order to execute your trades in a timely manner. One of the three worst stock trading mistakes is to ignore the market when it is virtually shouting at you to buy, sell, or simply hold.

Not Managing Trading Capital Wisely

No one is perfect and no trading strategy is perfect. This is why smart investors diversify their stock portfolios and why smart traders only trade stocks with a fraction of their trading capital. Going back to our original example, it takes a lot of work to make up for trading mistakes. No one wants the dreaded margin call when their stock trading capital no longer covers a series of trading mistakes. One of the worst stock trading mistakes is to listen to the greedy little voice that thinks you are at the casino and shouts all in when you should be backing out of a trade.

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The Three Worst Stock Trading Mistakes

  1. 1. By www.ProfitableInvestingTips.com
  2. 2. The famous investor Warren Buffet says that the first rule of investing is not to lose money and that the second rule is not to forget the first rule. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  3. 3. This is similar to what stock traders need to remember. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  4. 4. The fact is that if you lose half of your trading capital on a bad trade you need to double your money and more to make it up. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  5. 5. Remember that fees and commissions count in the business of stock trading. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  6. 6. With the idea firmly in mind that online stock trading is a business here are our thoughts about the three worst stock trading mistakes. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  7. 7. Trading Based on Tips and Not Research http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  8. 8. If there is such a thing as a sure thing in trading stocks it is probably illegal. Insider trading gets you years in Federal Prison. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  9. 9. Trading based on stock trading tips from someone who is not an inside simply ends up in losing trades and is one of the three worst stock trading mistakes. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  10. 10. Fundamental analysis of stocks in not limited to buy and hold investing. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  11. 11. Trend following in day trading can be very profitable. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  12. 12. But you need to look at trading patterns and have a basic sense of what drives the stock price besides market sentiment. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  13. 13. Once you have a clear understanding of an evolving trend you can buy and or sell, trade options, or simply scalp for profits. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  14. 14. One of the three worst stock trading mistakes is to assume that a trend will last forever. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  15. 15. Keep track of what is happening during a trend, always set your trading stops, and have a strategy that alerts you as to when you should stop and reassess. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  16. 16. If you receive a tip it may be a good one but you always need to check it out and only proceed when your own fundamental and technical analysis tells you to go ahead. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  17. 17. Not Following Trading Cues http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  18. 18. Technical analysis of market price patterns is the backbone of successful day trading. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  19. 19. You may have a very clear idea of where a stock is and where it will be due to clear changes in fundamentals. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  20. 20. However, you still need to follow trading cues in order to execute your trades in a timely manner. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  21. 21. One of the three worst stock trading mistakes is to ignore the market when it is virtually shouting at you to buy, sell, or simply hold. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  22. 22. Not Managing Trading Capital Wisely http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  23. 23. No one is perfect and no trading strategy is perfect. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  24. 24. This is why smart investors diversify their stock portfolios and why smart traders only trade stocks with a fraction of their trading capital. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  25. 25. Going back to our original example, it takes a lot of work to make up for trading mistakes. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  26. 26. No one wants the dreaded margin call when their stock trading capital no longer covers a series of trading mistakes. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes
  27. 27. One of the worst stock trading mistakes is to listen to the greedy little voice that thinks you are at the casino and shouts all in when you should be backing out of a trade. http://profitabletradingtips.com/tradinginvesting/the-three-worst-stock-trading-mistakes

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