Goal Number One: Avoid Becoming a Statistic
90% of new stock traders lose a majority of their funds, then quit. From extensive research and experience, we can vouch that this statistic is somewhat true. Though it may be a bit discouraging at first glance, this should not hold you back because there is a simple solution. In this blog post, you will discover the pitfalls that a typical rookie falls into, what to do to avoid becoming one of the statistics, and how to start trading so that you succeed in the stock market!
Goal Number Two: Avoid Forum-like Sites
If you have thought about joining Facebook forums, Sub-Reddit pages, and other forum-like sites to get your stock trading tips and advice, we would highly recommend that you avoid doing that at all costs. As you begin to educate yourself in the stock market and learn from the best out there, you will realize that successful traders avoid using other peoples' recommendations and insights to trade without researching themselves.
In his book, "How I Made $2,000,000 in the Stock Market," Nicolas Darvas specifically experienced loss when he listened to stock picks and buy/sell recommendations from professionals in wall street. Just as an individual is different from another, one person's trading strategy may not work for another. It is best to educate yourself on your chosen strategy, be it value investing using fundamental analysis, growth investing using techno-fundamental analysis, or even a purely technical analysis strategy. Develop a set of rules that you will not break, and most importantly, stick to them with flexibility.
Goal Number Three: Learn From Your Mistakes and Others
Most new traders fall into the same type of traps. According to Investopeia, 56% over-weigh their portfolio, 28% trade on gut feeling alone, 27% don't consider taxes when selling, and the list goes on. Understandably, when investing your real hard-earned money with the possibility of losing it, the playing field becomes a different ball game.
All in all, as you speak with other professionals, you will come to laugh about both typical and unique pitfalls that can or will happen to you.
Goal Number Four: Gain Confidence to the Point that it Becomes Boring
Having confidence means that you are highly educated in the subject and can execute trades with systems in place just in case things go wrong. Ultimately, anything that can happen will be part of your plan. We can help you build your knowledge and strategy, so there isn't much to worry about in that department.
Avoiding the thrill of gambling in the stock market is a real problem for a lot of people. When using your hard-earned money, emotions tend to get involved, which usually leads to irrational decision-making. Not to be surprised, but irrational decision-making usually leads to a loss of wealth in the markets.