What kind of mistakes do people make in stock market?
1) People while investing in stock market think it is easy money so they start trading without any knowledge of charts and stock movements and fall prey to the established players.
2) Once they incur small loss and in order to recover that small loss they do trading with more quantities and there the psychological factor comes in and they balloon their losses.
3) Now to get the deep hole of losses filled up quickly, they resort to derivative trading. Derivatives are nothing but weapons of mass destruction. They start playing on leverage and when leverage game starts people stop thinking.
4) They get off quickly from an uptrending stock and hold on to a falling stock hoping for its recovery and at last margin call comes and the account gets busted.
5)Sometimes investing in good stocks won't give instant returns. Takes some time - patience is utmost important.
6) People lose patience easily when other stocks starts increasing and their stock stays still, so they swap their investments only to realise that the early stock starts moving and now the invested stock stays still or starts falling.
7) They don't think stock market as a business and think it's a note printing machine which will start multiplying as soon as they start investing. Even the most lucrative business has its own gestation period so do investing in stocks.
8) Initially to build capital the risk management needs to be utmost strong and overleveraging should be avoided at any cost.
Do Proper study, manage n maintain Risk appetite.
Positive Psychology while investing in stocks n do research
to become good traders & investor!
Source: Internet