Common Stock Market Mistakes

 

Many beginner investors do not get stock market lessons and make fundamental mistakes about understanding how the stock market works and their stock picks.

• Many beginner stock market investors think it will be easier to subscribe to a tipping service. They then believe that if they follow what someone tells them that they should buy and sell, then they do not need to understand how the stock market works. The problem is no one provides precise timing and results reports. They are often delayed, and those providing the stock tips may also have a vested interest as the person providing the tips usually have bought the stock already. They also will usually have sold any stock picks before they advise you to sell. They also will not be held accountable for any losses you may make.

• The buy, hope and pray approach. Many People fail to realise that you cannot simply buy any stock and hold it and hope for it to go up. With this type of strategy timing the market is critical. In some aspects a long term buy and hold strategy in the stock market could be seen as a strategy gone wrong. The longer you have money invested and tied up in a position, the more at risk you are to changing market conditions. It is best to only buy when the market in general is going up, because as we know even the best stock in the world will go down if the whole market is plunging.

• It is easy to buy stocks approach. Beginner stock market investors believe it is easy to simply pick stocks. Especially if they first enter the market in favourable conditions. However it takes discipline, and an understanding of how the stock market works, fundamentals and technical analysis to make the right stock picks. You need many stock market lessons to know the best time to purchase and for the right price. You will need to learn how the stock market works, what technical analysis is and how to apply the principles.

• Using automated trading systems, these most commonly use very simple techniques such as monitoring moving averages and Open High Low Close on prices. These techniques can easily be learnt yourself with some simple stock market lessons, which will enable you to make your own decisions. I would strongly advise never to take the decision making process out of your own hands. It is extremely important that you own your own decisions and really take the time to learn how to trade with good stock market lessons. With as little as 10 – 30 minutes per day and the right understanding of how the stock market works you can begin to trade like a professional.

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