The biggest mistakes in stock trading

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Below we would like to briefly describe some of these mistakes so that you can avoid them when trading.


Especially beginners often make this mistake. They trade some shares with profit and think that the game at the stock exchange is quite easy and money can be earned here in the sleep. Thus, pure luck is often confused with skill and shortly thereafter the greed for profit sets in and the risk is increased. What often follows is unfortunately not the early retirement because of too large profits, but the ruin of the depot. But as a beginner you will inevitably have to make these experiences as well. So far, every investor we know has had to pay the price of learning. However, even apprenticeship money is not wasted, but an investment in the future. Because only in this way you learn and try to avoid the mistakes made in the future.

Ignoring trends

This mistake is also often made by beginners. They trade against a trend that has been going on for a long time, instead of with it. Of course, you can try this trading approach. The only problem is that the probability that the price continues to move in the direction of the trend is much greater than the probability that the trend is broken at this very moment. This applies equally to uptrends and downtrends. Therefore, do not try to be smarter than the market and trade as far as possible with the current trend. Not for nothing it is said: "The Trend is your Friend". It is still possible to enter a stock when the price has already climbed. The only decisive factor here is that the share is still in a stable upward trend.

This example shows the price trend of the Apple share in the 4h chart. After the share had dropped briefly, a stable upward trend was established again. Here, one could have definitely entered on the way up. The best time for an entry would have been a test of the lower line of the trend channel. For safety, a stop loss could have been set to avoid larger losses if the trend breaks.

In this case, one must also not succumb to the temptation to buy into a falling stock just because it now appears very cheap.  When a trend breaks, there are usually good reasons for it. Reaching into the falling knife here can cost you a lot of apprenticeship money. Of course, you could catch the bottom of the countermovement, but this is statistically rather unlikely. Let others try to buy the stock exactly at the bottom of the countermovement. Here you should wait until the stock catches again and a trend is established again. So you have missed the first profits of the price recovery, but most likely also avoided larger losses.

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Bad timing

Especially many beginners make initial profits with stock purchases, but do not know when to sell the paper again and thus lose part of their profits again or even make losses after initial profits. Mostly losers in are sold too late and winners are given away too early.
It is not for nothing that an old stock market wisdom says: limit losses, let profits run.

Often traders have correctly anticipated the market direction and are already in profit with their positions. However, the share is then sold more or less without reason for fear of losing the profit again, although the market continues to run in the right direction. Here investors give away cash money.