8 Common Mistakes Beginner Traders Make
In the business world, you are talking about the investors and investments, traders and trading, seller and selling, buyer and buying, and so on and so forth.
Don’t be confused with these terms as they only have one common idea, and that is to earn a profit! However, some investors almost always end up committing mistakes in the beginning. Since investments belong to a larger scale, you may focus first in trading so that you could easily understand it.
When we say traders, they are the ones who are into buying and selling goods, currencies or even stocks. They may be transacting using their own capital or using others’, whether a single proprietorship, partnership or a company. You can check the link and reviews about nextmarkets, stock exchange experts, money market and the likes for more information about trading to get more idea about this.
Traders can be vulnerable, most especially those who are just on their initial stage. Therefore, it is a must that a beginner trader should consider all the necessary factors in order to avoid committing the same common mistakes. And what are those general trading mistakes or flaws? You may try considering and understanding the following:
1. Failure to study the business project itself and just believing on hearsays, suggestions or proposals
As a beginner trader, you owe yourself everything. Whether you succeed or fail, there is no other person to be blamed for or to be proud of but you. It is your decision that can make or break your business because you’ve certainly relied on what you have studied, researched, and gathered about the business trading that you are handling.
As a start-up trader, you need to do a post-trading analysis to be able to determine your next move. Otherwise, you’d be left hanging, losing and crying over your lost capital. Do not dare to follow the advice from random people around you as some may be giving you the right advice because they are really concerned about your business, while some may be there to mess it up with how you manage your business. So if you will not primarily consider this aspect, you know what will happen to all your trading transactions.
2. Failure to focus on the positive side and failure to prepare for the negative ones
This component is sometimes being ignored by most beginners in the trading venture. You may be willing to take the risks, but you may also not be prepared to do so. Why? The business know-how may be present, but the guts do not exist. You must be mentally and emotionally prepared as a trader. You should be firm and certain of all your decisions. Emotional trading must be avoided at all times and be aware of its consequences in the business.
3. Failure to use a trading journal and completely learning at least one or two trading methods
When you are initiating a new business journey, you should be taking note of all the details, whether you are earning and so on. In that way, you would know what to change, remove, replace or retain on the methods that you are using or applying for future reference. Don’t rely on just remembering things when needed, but a good reminder is the one that you have absolute knowledge and experience. When there is something to decide now, you can go back and check what you’ve done in the past in any similar situation. It may look like a diary, but it is really helpful.
On the other hand, you can only refine gold by putting it on fire. You may fail several times, but take the chance of redefining and remolding your trading strategy instead of always looking and applying a new one. You may come up with the right trading strategy which is applicable to what you need by doing the trial and error experiment. Practice makes things perfect after all.
4. Failure to adapt the changing markets and business strategies
In business, you may also hear of the terms such as old school, traditional, obsolete, outdated, outworn, and stodgy. These words may be referred to the business techniques, strategies, and methods that are being used and applied. Unfortunately, the business deals of today’s world are far beyond what these traders have done before. For this reason, beginner traders must be open to new and advanced business marketing procedures and all. This will save the entire business from losing its target clients, affiliates and even investors. Thus, you will rest assured that your business is secured and stable.
5. Failure to expect the unexpected
A beginner trader should bear in mind that in the trading world, all things might occur or happen. Of course, you are expecting for continuous profits, more clients and even business expansions. However, as a trader, you should be realistic and expect worse case scenarios so that you can prepare and plan for the right move to take in case these business mishaps happen. Your venture in the business world will not always be rainbows and butterflies, so you must have an alternative action for every scenario that may happen. Also, in business, it is advisable to have more sources, investments or other methods for unexpected events or losses. This will help you in making the business to recover or rise again after every fall.
6. Failure to understand that difference between the long-term and short-term perspective
Beginner traders should be aware of the differences between the long-term and short-term perspective so that you would know how to deal with things in every situation. There are some factors that are beyond your control such as fortuitous events that can affect your business. Therefore, you need to make stable and suitable back-up plans for that just in case anything happens.
7. Failure to analyze the trading performance at the right time
In business, it is not advantageous to analyze the performance of your business on a daily basis since each day is different from other days. As a beginner trader, you should focus on doing your best method each day and gather all the necessary data in a long-term range before you compare its performance to become more competitive, stable, feasible and profitable.
8. Failure to know your competitors
A trader must be aware not only of how he runs the trading business, how it goes, or how it gets more clients or affiliates but also of how his trading competitors manage their own businesses. Your competitors play a vital role in your business, and knowing how to deal with your competitors will give you an advantage. That is why we have this saying that goes like this, “If you cannot beat them, join them.” Instead of getting more enemies, it would be wiser to turn them into your allies. Get involved with a fair play in a healthy kind of competition.
There are still lots of quotations, sayings, and words of wisdom that you can best relate with as far as successes and failures are concerned. Still, you should not rely on words to make your business succeed. Do the legwork and use the right strategies to manage your business.