Eleven most common investing mistakes

Every investor began his investment career without real experience. Many lack of experience have made mistakes that have been lessons for the future. Since the speculator websites are more informative and introducing the investment, so I decided to do a study / survey on "Main novice investors in shares Errors”. Used the results of the survey I wrote an article which I think useful and worth reading for investors, especially beginners.

So I have just indicated on the first and principal error beginners. Because many do not even familiar with the same exchange mechanism of investing, which may result in significant financial losses.

When you decide that you can already test the strength of the real exchange, invest only some of the available money. Take the amount that you are not afraid to "donate." So if you fail, the loss would be minimal. Speculating for some time with a small amount, you will understand how it works and will get some experience and, finally, get to know your greatest enemy - emotions. It seems quite scary thing, but wait! You've played the game with virtual money, so if you incurred loss you certainly did not have sleepless nights. And now you are risking your personal cash. Do not be hard on yourself.

Thus, the minimum invested in equities 1000 bucks. And less possible, but it is harder to earn with a smaller amount. Do not forget that you have to first work out a commission to pay to brokers. So the amount you invest, you start choosing themselves, but the minimum is 1000 dollars.

How to avoid investing mistakes? Errors usually are made for the following reasons: emotions, hot temper, inexperience, lack of knowledge.

See also: http://money.cnn.com/magazines/moneymag/money101/lesson5/index.htm

about swing trading: http://en.wikipedia.org/wiki/Swing_trading

and an article on successful day trading: http://forex-news-trading.blogspot.com/2013/08/ultimate-guide-to-successful-day-trading.html

Tips on how to avoid these mistakes:

First If you are a new player in the investment world, I suggest investing in liquid (reaching high turnover) shares or at least partially liquid. Because playing the illiquid with little knowledge of the market, love only people, who are risk lovers. Beginners disapprove of it to pry into the illiquid shares.

Second If you are new to investing for a longer period of time rather than try to catch waves and speculate. Speculates on the people who are listed in the first paragraph. Newly arrived to the exchange people can very easily make a big loss while jumping around on market waves.

3rd If you have a portfolio of over 2000 dollars, you can already start to think about diversification (portfolio split into several different shares). Diversification reduces the risk of substantial losses.

4th Set limits when you get rid of stock. For example: You share fell -7-8% (mostly proposed percentage) of your purchase price, you sell them without any doubt. It is also worthwhile to set limits, and plus that would later tame your excessive greed, which will not earn you anything.

5th Many beginners who have just transferred money in the account are rushing to buy something familiar with equities. They buy anything, and only then begin to take interest in what is where. Well, often later in life and a lot of swearing in question "what happened, why there is no" etc. Take your time, check before buying the shares, read the discussions on the forums.

6th Falling share price, do not attempt to catch-called "bottom", it is better to buy shares when you see the shares fall have really ended. During such bottom catching you can buy a very expensive stock.

7th Understand that the shares are not always there, so if you have a large profit, worth somewhere to sell part of the shares to fall in the future share your previously recorded gains offset losses.

8th Avoid buying falling shares in order to reduce the cost of your purchase. Be cautious. It is possible to do so when the fall is local, triggered by some investors' willingness to take off the profits, or due to seasonality. If the fundamental reasons (declining profits, the deteriorating situation in the market, etc.), one needs to sell the held shares in spite of everything.

9th Do not rush to buy shares if it suddenly jumps, without any fundamental news to back it up. This means either someone knows something, or blows up the price artificially. We all understand that everyone wants quick high profits, but the risk in this case is a very important factor, and with being a beginner it is not advisable to play with it.

10th Do not rush to sell the shares if they drop sharply, and there was not any fundamental news for the fall. This means either someone knows something or beating down the price artificially. First find out the cause of the fall, and then make the conclusions.

11th There is a term "hanging man" (hanged man), which I think every investor perfectly knows. If the stock price rises very sharp or very sharp falls, mostly small investors having not assessed the real situation start headlong selling / buying shares. Well and in fact the real situation is not so good / bad, and the price will eventually recover (happens to be, and to the starting point). So those investors who have bought / sold the shares the same top / bottom, which means that they "hanged", "gouged out" as the title says. They got rid of the shares at a very low price, even though they could sell it for a much higher, or purchased at a much higher price than it was worth. Be more patient, less embark on controlling emotions and stay tuned.

So try to follow the emotions less, do not rush to invest, do not listen blindly what others say, and you keep your personal opinion. Try to be non impulsive. Once you find and create your own personal investment strategy and follow it, do not change it. Because the strategy is suitable for others might not be suitable for you. Learn about market developments, ask when something is not clear, understand, and be perfected.