Common Mistakes in Stock Trading

Common Mistakes in Stock Trading

Ignoring stop loss
Setting stop-loss fixes your loss and stop to blow your account with huge losses. In trading you have to use stop-loss orders it minimizes your losses
 
Emotional about money
Don’t be emotional about your money, people get emotional when they do losses and start taking revenge from the market. Remember one thing, the market is always right and always supreme.
 
Bad risk-reward ratio
Making big loss and taking small profits put you in trouble, you can use risk-reward ratio in trading. Which means how much profit you are ready to take a risk. The minimum risk-reward ratio is 1:2.
 
Using too much to leverage
Leverage is like an addiction, taking too much leverage can blow your account in a few trades. So kindly, make a risk and money management when you trade.
 

 

 
Doing averaging
Averaging in losing position increase the risk and make your account zero. Doing averaging require double funds at every time you average your position.
 
Over-trading
Trading too much can disturb your system, rules, and convert your profit trades into a loss.
 
Trading with huge quantity
Trade with a suitable quantity, don’t trade with a huge quantity. Quantity of trade depends upon the size of your account. You should not use leverage to maximize your quantity.
 
Hurry to book profits
Exit your trade too early while you are in profit and exit your trade too late while you are in loss can destroy your risk-reward ratio and make you profitable in end.
 
Keep holding losing positions
Holding you're losses and assuming it will turn in profit can blow your account in a few days, that’s why taking stop-loss order can reduce your losses.
 
Overnight risk near the event
Holding your position over the night near any corporate event can increase your risk because the market is too volatile in a corporate event.
 

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