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Stock Market Trading-main Mistakes To Avoid
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Are you one of those people who believe that stock market trading is the simplest way to make money? You are not the only person to think that way and it is true to a certain extent provided you don't waste all the good work done through undisciplined trading. Being patients, understanding the market, and taking losses in your stride are the best way to go. Still, here are some mistakes you should avoid when you want to make money trading in stocks.
Avoid trade during first half of market session
When it comes to trading in stock markets, it is important to rein in your high horses and wait for the right time to make your move. Remember, during the very first session of stock market trading, people get high on emotions. This hampers proper decision-making and mistakes become unavoidable. Market will lure novice traders and compel them to take stance during this session, while the market positions become clear only later on. Experienced traders use the first session to understand intraday patterns or notice trading breakouts.
Don't ignore the market phase
When you want to attain success through online stock trading India, it will be a big mistake to ignore the current market phase. It will be either,
* Trending Phase
* Trading Phase
Trending phase signifies sell or buy breakouts while trading phase is the time of selling strength and buying weakness! As a successful trader, you need to understand the market mood for correct decision-making. Otherwise, you will use wrong indicators during wrong conditions of the market. Flexibility related to changing positions and developing the market feel are important for trading success.
Never take undue risks
Being overconfident regarding the market and taking undue risks can be simply suicidal when it comes to online share market trading. Undisciplined traders rely heavily on inklings and take undue risks many times mistakenly believing that the time is ripe for making profits. Naturally, such baseless decision-making leads to heavy drawdowns.
Reduce position size as needed
When warranted, you shouldn't dally reduction in position size because postponing it unnecessarily can lead to complication of situation. When you're not getting clear signals from the market it means that you should promptly reduce your position size without further ado. Market exposure at any time should depend upon the mood of the market. Booking partial profits immediately as the trade begins earning 2-3 times of average risks makes good trading sense.
Don't seem overeager to book profits
Profits related to Stock market trading accounts, mostly remains skewed to few trades. When market seems to act right, you should never seem ready to book profits. Too early bookings will make you for go substantial trends, in spite of the fact that you are well within the market at the time. Even if you simply cannot stop yourself from booking profits make sure that you keep certain positions still open, taking advantage of subsequent moves.
Just stay clear of these common mistakes mentioned above and you will be able to give yourself a fighting chance at the stock markets for sure.
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