That time of the year has come when the whole country is in a festive mood. A part of India celebrates this festival as Navratri whereas the other part celebrates this festival as Durga Puja.
The common thing between these festivals is that it is celebrated for the victory of good against wrongdoing.
Similarly, when trading in the stock market, traders tend to make mistakes in trading.
|Table of Contents|
|Not trading with the trend|
|Not willing to accept losses|
|Making no trading plan|
5 common mistakes in trading to overcome this Navratri
1. Not trading with the trend:
“Trend is your friend”, this statement absolutely holds when trading in the stock market.
One should trade along with the trend which means that when the stock is in an uptrend then they should buy and when it reverses to the downtrend, and then they should sell.
Traders who do not want high risk in trading should avoid contra trading, especially the novice traders.
Some novice traders try to trade against the trend which results in making huge losses and one of the common mistakes in trading.
Thus, it is best for novice traders to trade with the trend to avoid risks and prevent huge losses.
2. Not willing to accept losses:
When the prices start going against your expectations, then you should square off your position and accept the losses.
Some traders keep averaging the price in the expectation that the prices will go according to their predicted direction and they are not willing to accept the losses.
But to be successful in trading one should start accepting the losses, as in this way they will able to learn from their mistakes in trading.
3. Getting Emotional:
Emotions are the biggest enemies when trading in the stock market.
When the market is sharply rising then you may become greedy as you want to earn more and more profits.
But what happens when the market suddenly reverses to the downside?
Because of your emotions, you will start incurring losses and could make mistakes in trading
So traders should not let emotions come in the way of their trading plans and strategies.
The traders tend to overtrade to average or recover losses in the market.
Traders also start overtrading in a very volatile market. This is one of the common mistakes in trading that traders do.
Trading in the volatile market is very risky especially for novice traders as the direction of the prices may reverse at any time.
This is the time when the novice traders should not overtrade in the market as overtrading in this type of market may lead to huge losses.
Novice traders can stay out of the market during this time and use this time to gain knowledge about the stock market.
5. Making no trading plan:
Some traders directly start trading in the market without a trading plan.
Trading is a full-time job. One should first properly analyze the stocks, make a trading plan, and then start trading.
Making a trading plan involves deciding the entry price, stop loss, price target, exit price, etc.
Directly starting trading in the stock without having any plan can lead to losses.
So first make a proper trading plan and then jump to trading in the stock market.
So try to overcome these 5 mistakes when trading and start gaining knowledge about the stock market.
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Take some time out to improve your trading strategies and gaining knowledge on different areas of the stock market and try to overcome the above stated mistakes in trading.
Wishing you all a Happy Durga Puja!