3 Common Trading Mistakes

There are a number of common trading mistakes that new investors make. Learning these mistakes and avoiding them can help save you from taking unimaginable losses.

The three common trading mistakes that new traders will make are.

1. Exiting too early

Targets are great, they give you an idea on how much you think you will make if you are right. But sometimes no target is the best target. Exiting too early can make you miss the big profit. You might make a small 10% gain, which is always nice.

But that doesn't mean the stock will not go up another 50%. I prefer the idea of trading with the trend, and exiting out early is a way of anticipating that the position has topped before it gives you any conclusive signs.

2. Switching Strategies

I have been guilty of this before. You buy something with a game plan, but suddenly that game plan doesn't work. Instead of carrying out your trade like you intended it is easy to completely change your plan.

Every time I justified changing my original plan when I was in a trade it turned out against me.

3. Not learning from the past

Perhaps the most important thing you can do is to learn from your mistakes. We are all human, we all do stupid things. But unless we can learn from our mistakes we are destined to just keep repeating them, over and over and over again.

Traders are like scientist, constantly trying to figure out the world they observe.

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