Top 3 mistakes to avoid in trading and investing

There are plenty of articles that says mistakes a trader or an investor must avoid while investing in the market. However here we are also going to dig a level deep to understand why it is called a mistake in stock market.

Investing without research

If a trader or investor gets into markets and look up to tip and recommendations then they are designed to fail! Why? Lets understand this with two scenario:

  • Scenario 1: Tip is right! In this case, investor knows the job of the recommendation is to get you invested. No one can guarantee 100% returns. Stock market is a game of probabilities. Bets are taken typically on high probability winning rate. Since investor / trader has entered without own research, his conviction will be any how very low! With doubts, anxiety and pressure they are not going to sustain in the position for long. Volatility will add more pressure even when market has temporarily gone in reverse direction.
  • Scenario 2: Tip is wrong! Nothing to say further trust gone, faith gone, money gone!

Investing and Trading without tools

Why? Do you know even professional traders have a team of analysts backing them with high quality analysis and risk management strategies. A non professional investor and trader would stand no chance against them. It is just not about money! It is about ammunition in your kitty. Like own research & tools that helps you to view the market with right perspective specially at the time of taking position. It will enable continuous learnings about market behavior, so that a trader and investor can manage their own risk and avoid losses! Try Sentiments Decoder, you won’t regret your decision.

No planning before taking positions

Why? If you enter a position with a prepared mind then you will find the ways to make situation favourable. However if you fail to plan! then you will plan to fail! Without planning you will react with heavy emotions and bias in the market. You will end up overlooking obvious! Market is volatile, what may seems to be against you may be just temporary phase and holding your position as per your plan, may turnaround the entire approach to the trading and investing.

Investing / Trading in the market is subject to market risk. It’s very important to ensure right approach and mindset before you enter into a trade. At the end of the day it’s a business, and like any other business it requires research, analysis, insights to plan your next move.

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