Top 7 Mistakes Beginners make in Trading (by Jordi Martí)
Here are the most common mistakes I see new traders make:
1. People think "it's easy" 2. People think "I'm going to get rich" 3. Reliance on other people's ideas 4. Lack of passion 5. Looking for a stroke of luck 6. Lack of discipline 7. Lack of method
1. People think "it's easy" The technique is very simple. The academic part of trading is very simple. I assure you that any professional has to study much more than we have to be traders. We just have to know how to do addition and subtraction.
2. People think "I'm going to get rich"
3. Reliance on other people's ideas Be careful when people come to you saying that in the Bank they have told me this or that. Or that they have read in the Financial Times that the shares in X are going to rise to infinity by the end of the year.
Goldman Sachs recently predicted the S & P500 to go up to 3,500 or thereabouts and the next day it suffered the biggest drop in the last three years. You are going to bet your money on the opinions of third parties that are not as prescient as they think they are. And the information they have can be biased (because for funds to buy someone has to sell them and for funds to sell someone has to buy them). And who is this someone? We, the traders.
Therefore, do not listen to your friends, the press, or your colleague who knows a lot, or someone who works in the bank. Own your criteria, which may or may not be aligned with that of a colleague who works in a bank and knows a lot. Because you are risking your money and not theirs. Be skeptical: remember, when someone from the bank comes and tells you to buy shares in company X, perhaps that bank is a shareholder in that company.
4. Lack of passion Why is passion important? Because this is a very long road.You have to be passionate about trading because it is very difficult and sometimes boring. It requires deep reserves of patience. For some, it will be months but for most, it will be years.
5. Look for a stroke of luck It is the fastest way to go bankrupt. "Hey, they told me that the S & P500 is going to go down, I'm going to put everything in short."
6. Lack of discipline
7. Lack of method The method for me is the least important. The majority of methods work, what we do not always pay attention to, however, is how to apply them. When operations go wrong, it is never the market's fault. The market is always right. The fault is yours because although it is true that there are days that you have to lose, you have to lose with sense. If you lose like crazy the fault is yours.
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[JORDI MARTÍ] (https://canaltrader.com/en/teachers/jordi-marti) Head of Studies of Canal Trader school
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