New investors don’t have monopoly of mistakes. In fact, even old timers commit mistakes themselves, though they usually know how to Mobile Trader Platform fix those mistakes more quickly than new ones. By contrast, newbie investors typically commit mistakes without having some backup plans.
Mistakes happen because of various Forex Trading reasons, one being new to the financial markets. While everybody indeed had to be a beginner first before being an experienced one, there are ways to be more prepared before diving headfirst into the market.
And with that, the very first step you can do is to know which mistakes are very commonly committed by investors. Here are some of them.
Getting controlled by emotion
While it’s human nature to feel something like an overwhelming emotion, investing requires you to be thick-skinned and tough when faced with intense situations. Some of the hardest emotions to fight when you’re an investor are fear, greed, too much excitement, and frustration.
New investors, no matter how much they have prepared for such emotions, still tend to get carried away by such emotions. That’s one of the reasons why they will definitely commit at least one mistake.
When you are too fearful, you might not want to invest in something that seems a really good investment. When this becomes too overwhelming, even the assets that you have bought out of confidence will look bleak and dangerous, making you want to get out of the financial markets at the drop of the hat.
Getting swayed by popular opinion
What we mean by “popular opinion” in this context is the point at which you believe something to be a great investment even without checking the basis of such claims.
For instance, you may have heard news and rumours that a certain company’s stock is going to increase exponentially because of another related rumour. Everybody talks about it and everybody has their opinion. It then gets tempting to nod and say yes to what they say just because it’s all too believable.
More often than not, the excitement is not really backed up by solid data but with only patches of news and tidbits of common consensus.
Luckily, this is easy enough to fix. Before you click that buy button, consider first if you’re just getting swayed by the noise in the market. If you have some doubts, it’s time to do your own extensive research on the matter. You have to trust your own judgment, which you should base on factual information and critical interpretation of data.
Not using tools and analysis
Some investors think that the market is just a trading game, where you either win a bet or lose your money. That’s actually a gross oversimplification of how the market really works.
Aside from stacking up knowledge from news headlines and market commentaries, you should also learn the importance of knowing what tools are for and what theories and analysis say. In fact, we would go further and say that you are not really investing or trading if you don’t use either technical anlaysis or fundamental analysis or both.