Jump into the stock market on hype

• Right after COVID, many people talked about the unbelievable profits they’ve made by trading stocks. After a couple of days-weeks maximum, whatever stock they bought, they sold and made a profit.

• After that, you’ve undoubtedly asked yourself: why are you still not a trader? So, the following scenario is straightforward: you invest your first €100, and let’s assume you’re lucky enough to make a €20 profit. The logical question pops up: by investing €10,000, I’ll make €2,000 easily. Done! You deposited 10k, but then something went wrong.

Attempting to follow the market trend and make money on every price change

• So, you decided to make money using every opportunity. When the stock price is growing or when the price is going down. You carefully track the trend and fix every minimal result of price change during one session.

• In most cases, this will result in a situation when you are one step behind the market: you are buying on highs and selling on lows by trying to predict short price changes. As a result, you end your day with a negative P&L, and after a few days, you are done with investments.

Trade for the amount of money that is critical for you

• Imagine you invested your first €100 and made your first profit. But at the same time, you’ve been tracking a list of stocks that cost more than you can afford to buy for your initial amount. You are OK with that for now.

• After some time and pairs of successful deals, you finally decided to raise a bar to make real money. Last three months, let’s say you prove your concept and it works, so the time is now! You are adding a critical amount and are ready to win, but this amount will not let you diversify your portfolio enough, and you decide to buy three stocks for your money.

• Then for some reason, the price dropped, and you were scared of your first red day and decided to fix losses telling yourself that at least part of them would be compensated by profits you’d made before. You are closing positions by fixing losses and trying to convince yourself that you saved at least something. Goal achieved: you lost money, and you are unhappy.

Join our wrldtrade community to avoid these and other common trading mistakes!