Stock Trading Mistakes Part 1

The risks of day trading are many, remember that for every winning trade, there is always someone who took the opposite side of the trade and lost some of their capital. Stock market trading can be seen as a zero sum game.
Please read these 10 common stock trading mistakes that many people make and avoid them in order to have a profitable career as a stock market trader.

• Unrealistic expectations. Your head is in the sky and you dream about making $10 000 a day after a 5 day seminar. This is not going to happen.
• Unrealistic expectations. Most day traders begin their career by losing money. They lose money consistently for weeks and months at a time, before they develop the required skill to succeed in stock market trading.

A sure way to damage you stock market psyche is to begin your stock market trading career with the expectation that you will be making bucket loads of money in your first year.

Unfortunately, many novice traders get lured into the industry that way. They believe that they can quit their jobs trade full time. Not to forget that they will do this full time trading on the beach from their iPhone.

While this luxury is something that many beginner stock market day traders can aspire to, the likelihood of this happening in the first 2 years is unlikely.

Research shows that 95 percent of day traders wash out in the first year. Brokerage firms spend a lot of money on TV ads, internet ads and radio ads to attract stock market traders, because the success rate of day traders succeeding in their first year is 5%.

With the SEC day trading rules becoming more strict in order to prevent individuals from being financially hurt from the effects of trading, many brokerage companies require a minimum of $25 000 to open up a day trading account.

Even at the minimum $25k to start a day trading account, many traders find themselves unable to trade because their accounts are frozen when their accounts fall below the $25k minimum.

As a beginner stock market trader, you can expect that it will take you between 1-3 years of constantly refining your trading plan, winning some trades and losing some trades before you become truly profitable in your day trading career.

You can expect that you will have to put in a lot of work on your trading psychology, personal beliefs and character as an individual before you can master the stock market game.

As stated in one of our earlier lesson, when stock market traders trade the market or a particular stock, they are in essence trading the market psychology which is made up of opinions and beliefs of the other traders that are participating in that stock.

Traders don’t trade companies, they trader the opinions of other individuals trading that stock.

Stock Trading Mistake # 1:

Before you take the first step on your path to being a day trader, know that you have a long road ahead of you.

You will have to engage in a lot of learning about stock market basics, technical analysis fundamentals And after you have acquired the understanding of the stock market, you will spend 95% of your time, energy and effort mastering the stock market psychology.

95% of day traders fail, because they fail to understand how important market psychology is.

They believe it’s all about stock market trading systems and holy grails that will lead them to trading success. It’s not, it’s all about stock market basics and stock market psychology.

• Stock Trading Mistakes Part 2
• Stock Trading Mistakes Part 3
• Day Trading Mistakes Part 4
• Day Trading Mistakes Part 4
• Day Trading Mistakes Part 4
• Day Trading Mistakes Part 5