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.
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.
