Making some mistakes is part and parcel of the game. But to continue making the same mistakes again and again is unacceptable. If you are losing money consistently, better stop immediately. Upgrade yourself first and fight later.
The shrewd learn from the mistakes of others. The foolish don't even learn from their own mistakes.
A novice is bound to have many disadvantages and make many mistakes when he starts to trade. What are these mistakes and disadvantages? Below are some of them:
1. Yielding to the herd instinct
A newbie in the market is a sheep. He has not idea of his own. So he simply follow his friends, thinking there is safety in numbers. Very soon he will find out that there is no safety in numbers and some of his money has gone.
2. Listening to a tip
A tip is seldom a good tip, especially one that comes from a remiser. Why? It's simple logic. When a big boy wants to unload his stocks, he will get someone to tell his remiser that the stock is a good buy. Thus you buy what he sells.
There is only one good tip you can get from your remiser. Ask him for the name of the person who consistently wins. (Assuming there is one). Then you can watch him closely and learn from him.
Many mistakes come from haste. The Chinese says: 万事皆从急中错.
When you are new in the market, you have little patience to wait. Hence you move in and out of the market too frequently. You forget that every time you trade, you pay money to the government, the broker firm and Bursa.
4. Lack of experience, lack of knowledge & lack of wisdom
Experience is the best teacher. It is also the most important. Unfortunately, it is the most costly as well. And the market is the most expensive place to find this out.
5. Trading without a plan
It is said that if you failed to plan, you planned to fail. No one ever goes to business without a plan; no one ever built a house without a plan, and no one ever goes to battle without a plan. Trading in the stock market is akin to going to a battle. Do you think you can win without a plan?
6. Overestimating your own ability
This is a very common error. When you win, you say you are skillful; when you lose, you say luck is not with you.
My advice is:
Be knowledgeable, be patient, trade with a plan and always remember that
Luck Favors The Prepared Mind.