MOST COMMON MISTAKES IN EQUITY

1. TRYING TO PICK TOPS AND BOTTOMS

Trying to pinpoint tops and bottoms is a risky business where the possibility of taking a loss far outweighs the potential gain. By exercising patience and waiting for a definite high or low to appear, you’ll increase your odds for making a profit while reducing your risk and stress.

2. AVOIDING STOP ORDERS

Using stop Orders is easy discipline, but remember to use discretion when using them. When placed too tightly, stops can take you out of the action before the market has made a significant move.

3. BEING GREEDY

You need to decide first that What you want ?Then a trade goes in your favor and you’ve already made a handsome profit, it’s sometimes a good idea to take the money and run. One of the biggest mistakes some traders make is staying in the market for too long hoping for a windfall that will make them rich all at once. Of all the emotions that can affect trading results, greed is the most destructive.

4. TRADING TOO MANY MARKETS AT ONCE

You would have lack of concentration if you spread yourself too thin by trying to trade too many different markets at once, you won't have the information and "feel" you need to make good decisions. Most expert traders recommend that you limit your trading to one or two markets. If you do choose to trade several different futures, it’s best to trade groups that move in relation to one another.

5. NOT DOING YOUR HOMEWORK

Do you home work on regular basis as you should know where are you investing ? Why had you chosen that? and whats your target?. Best traders are the ones who have made a commitment to do what it takes to become a success. They’re willing to study charts or learn new trading methods so they’re always ready for what the market throws their way. Once you’ve made that commitment yourself, you’ve taken your first step toward trading success.

6. LETTING LOSSES RUN

Don’t ever be afraid to accept defeat.If you had played wrong due to unceratin causes or lack of information or simply due to bad luck try to accept the loss and get out of it instead making the trap more severe in order to recover your losses instantly.

7.REVERSING YOUR POSITION

If your position is wrong, avoid the temptation of making a 180-degree turn. Instead, get out and give your trading a rest before taking another position. Ignore this advice, and you run the risk of being whipsawed—losing as the market moves against you, then losing more when the market turns and goes against you again.

8. FOLLOWING THE MAJORITY

Successful traders know that it’s better to "lead the pack" than it is to blindly "follow the herd." Because the biggest profits are made by catching moves before the crowd has a chance to react.