Buying Stocks Without a Broker

Five Dangerous Trading Errors That Can Cost You Your Life Savings

Whilst really great traders such as Warren Buffet can make trading look simple, for the rest of us it is certainly not. It requires a lot of knowledge and experience and if you don’t have any formal education it can be a heavy learning curve. Nevertheless, many hugely successful investors are self taught. Without doubt they will all tell you how they lost a small fortune before they started turning things around.

With on-line stock trading there is just no replacement for experience. You simply have to get that first hand expertise that not even the most effective books in the world can provide you. Thankfully we can learn a lot from others flaws. Here are a few of the most lethal faults in online share trading.

- Running after Stocks
Any time you start going after stocks simply because you like it or have heard about it you are probably going to run after it all over the place – always wishing that it’s going to make a move. Hoping that a stock will make a move is certainly not a wise way to trade. Alternatively, you should always trade on facts. Trade on signals that tell you a stock is gonna move and don’t run after rumors. They are virtually always completely wrong.

- Trading With Scared Capital
Exactly what money are you investing with? Is it your family’s life savings or even your retirement fund? The golden principle is to never trade with money that you can’t afford to burn. If you are fearful of losing you will bring the wrong mentality to your investing and trading with scared money is a recipe for making fearful decisions.

- Hanging On
Everybody knows that holding on to a losing trade is a foolish idea. The problem is that when we have a investment that we believe in, we have a tendency to hope that it will do what we want it to do. This is the error that has seen many traders hold on to a losing stock way longer than they should. It’s vitally important to set you enter and exit points on every trade. If you have to get out! Cut your losses as soon as possible.

- Hunches
Trading on hunches or “gut feelings” is possibly one of the biggest faults that novice traders make. Great traders never trade on hunches, tip-offs and gut feelings. Yes, gut feelings are important, but a great trader lets the facts to guide him ( or her ). If you have a good feeling about a specific stock, by all means go with it but make sure that you go and look at it and notice if there is genuine value or not. You could possibly get lucky every now and again, but in the long run you have to be intelligent.

- Being The Lone Ranger
Locking yourself in your basement when you are trading is not a wise way to do it. Learning from some other traders is critical to be profitable. We discover an enormous quantity from others who are in the same boat. With the countless online forums and also podcasts and YouTube videos there’s no reason to go it by yourself. Enroll in as many seminars as you can. Read as numerous books as you can and keep studying – particularly from others. This is one particular endeavor where you want to swallow you pride and acquire all the support you can.