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Top 5 stock trading mistakes committed by the beginners

 

PennyStocksLooking for too much profit

Mostly new investors don’t have basic understating about the stock market dynamics,so they always in search of too much profit in too less time.So mostly stock experts advice them to trade on daily basis.They should buy and sell stocks on daily basis.This strategy will earn them less profit but it will bring profit on consistent basis.

Lack of knowledge

Most of the  investors jump into the trading arena without getting adequate knowledge about the stock trading.Stock investors should at least have some kind of degree or basic knowledge about stocks and stock trading before jumping into this arena. Knowledge is very compulsory as it helps you in real meaning of stocks and stocks investing .

Investing in Penny stocks

Penny stocks are the type of trading stocks,which are traded below $5 in United States and below £ 1 in the United Kingdom.These stocks are very attractive for the new investors,as they offer huge returns in very short span of time and are very cheap to buy.They bring huge returns , but are very risky  and can also bring huge losses for investors.Most of the stock experts ask new investors to keep their distances from the penny stock schemes,as they are mostly scams.Pump /dump  and chop stocks schemes  are  the best examples of the penny stock scams.

Invest in same type of stocks

As Warren Buffet said ” Don’t put your all eggs in same basket”.This is one of the most common mistake committed by the new investors.As they are new in the field,they always try t invest in the most profitable sector f the industry.To be a successful stock trader,on should learn to diversify its stock portfolio,as this strategy will spread the risk of investing and the loss will be minimum.

Too much reliance on news

As new investors are unaware of the difference between the real news and fake news,so they mostly invest by following these fake news. Following these news can be quite risky,as that behavior can bring huge losses for the investor.

 

 

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About Emaad Qureshi