Top 4 Common Trading Mistakes That You Need To Avoid

Mirriam MacWilliams on Trading mistakes

 

 

 

 

 

 

 

 

 

So if anyone were to consider investing here are some common mistakes that need to be avoided:

  1. Trading without proper knowledge – it is not just a matter of opening a brokerage account, buying a stock and hoping for the best.  Get educated!
  2. Not having a trading plan –  this takes the guesswork out of when to buy the stock and then when to sell it
  3. Not exercising proper money management skills – avoid having your entire capital in the market at all times
  4. Not knowing how to protect your investment capital while it is on invested in the market – the proper placement of orders designed to protect your capital

The Power of Leverage

I strongly believe that you can take a small investment capital and generate extraordinary returns.  I know because I have done so and continue to currently do so.

I do trade with options and greatly benefit from the enormous leverage they provide.  You can actually these days begin investing with no capital at all – simply virtually trade and only when you are satisfied with your returns should you consider trading with live capital.

Options are a leveraged instrument.  Therefore they should be applied to a small portion of your overall investment capital.   A professional manager would best be suited for the management of the balance of the portfolio.

I conduct options trading courses in Singapore, Malaysia and Hong Kong and show our members how to set up proper trading plans. You have to know when you are going to get out before you enter the trade.

Combining Technicals and Fundamentals

I use a variety of trading styles where I will be in a trade for 3-4 days’ or 1-2 months’ window of time.

Typically, I like to use the Fundamentals to give me a direction with the expectation that strong stocks will get stronger while the weaker stocks can get weaker. I will then use the technicals to help me time my entry.

If you are interested to find out more, check out our free 2-hour introductory seminars over at Wealth Mentors.