Stock market for beginners
Stock market traders and stock market investors are a rare breed of individuals. Many stock market investors have an aversion to risk. It is understandable to not want to lose your hard earned money. Ultimately the risks of trading or stock market investing can never be completely eliminated. After all, market forces are complex and hard to understand, much less predict.
Everyday, there are many people trading on the stock market exchange, and day in day out, there are people losing money and there are people making a killing. Obviously, everyone wants to be on the winning side. But unfortunately, most people lose their hard earned money when investing in the stock market. There are many reasons why these people lose money.
If a stock market investors believes in their ability to make money in the stock market, however, fails to eradicate their nasty habit of not cutting losing trades early, no matter how much they make on their winning days, they will eventually lose all that money and end up even losing their trading capital.
One of the most common mistakes that beginner stock market investors make is increasing their share size to make up loses that they have incurred.
While a loss is loss, and the nature of humans is to avoid loss at all costs, the stock market trading game will yield some losses. Even when stock market traders have been trading for 15 years, they still experience days when they lose money. Some traders, realize that the game of stock market trading is a long road of loses, wins and mistakes. They bear these losses and mistakes with grace. They focus on their trading plans and proceed on the right course to being consistent profitable traders.
After about a year of losing, finding and eradicating mistakes, they still haven’t made enough money to cover their time and investment. They start getting frustrated. Naturally, we all want to see progress when attempting something new. We want to be able to chart our progress on a nice graph and see how far we have come. Then one day, during the course of a frustrating trading day, an opportunity arises in the market. The trader finds the trade he has often dreamt of. Instead of sticking to their trading plan, the trader wants to ‘capitalize’ on this wonderful opportunity. He veers of course and piles in three times the shares that he would normally place in a trade. he believe that the market gods are smiling down at him.
The trader has worked a whole year, sticking to and following their trading plan, he never experienced this wonderful feeling of success when he stuck to the plan? Doubt begins to creep in; sticking to the plan is not how this game is to be played?” The next time the trader veers away from his trading plan, he loses a lot of money.
The market loves to give you unearned money, in an attempt to, show its potential, and entice you to become undisciplined? When the trader was following his trading plan, the learning process was a lot slow; when the trader veered off, the ride was exhilarating, but dangerous.
This is the kind of behavior traders engage in when they are frustrated and want their money back from the market. They will risk a lot more shares than what their trading plan stipulates and they will have one or four lucky breaks, however, in the end the market demands its money back. It only lets you keep the money once you’ve proven mastery, self discipline and have eliminated most of your trading mistakes.
Always follow your trading plan. Stick to the share size that you have stipulated in your trading plan and patiently track your progress;
you are bound to be successful in the end. It might take you few years, and it might even take you 10 years, however long it takes you to make money, you will soon prevail and all those years of hard work will always pay off.
I believe in the old adage that if you give a man a meal, you feed him for the day; but help him learn to fish, and you feed him for life. Basically, I want to teach you how to "fish" on your own and for the rest of your life.
Good luck and safe trading