Trading the stock market is a very abnormal way of making money.
There are so many ways for you to make or lose money, and you have to keep on your toes and be cautious to avoid losing your money.
Here are the top 3 mistakes traders will make.
1.
Only Looking at Profits Newer traders are especially vulnerable here.
Everyone wants to have huge returns with no losses.
It is very tempting to look at how much you can expect to make and not even give the slightest attention to what will happen if the trade does not go your way.
Thinking positive is a great thing, but if you approach the stock market with a "I can't lose" attitude it will chew you up and spit you out.
The first thing professional traders look at is controlling risk.
2.
Underestimating Emotions You have to be able to control your emotions otherwise you will continuously make poor decisions based off of fear, greed, and more.
Emotions can be very illogical.
Many people who have not traded the stock market do not believe they will affect them that much, well they are wrong.
You cannot underestimate or give into your emotions when trading.
The more logical and less emotional your trading is the better you will do in the long term.
3.
Not Following their Rules This is a huge problem that can affect even professional traders.
When you are in the stock market you will be vastly more profitable if you can just follow your rules strictly.
Anytime I have detoured away from my rules it has cost me dearly.
Without strict trading rules trading is basically just a guessing game, you might get lucky now and then but it the long run it is a losing game.
Your rules on the other hand are built to give you the edge.