Every trader who wants to trade in the Indian stock market aspires to earn maximum profits. However, not every trader succeeds at it. Many traders commit mistakes, which are common. These common trading mistakes in online share trading spell doom for traders. Here we share some of these mistakes so that you avoid them while trading.
1. Investing Without Proper Market Knowledge
This is something, which you should avoid at all costs. When you start equity trading, it should only be done after you have the complete knowledge of the market. If you enter the market without understanding its workings, then trading might get difficult for you.
2. Following Other Traders Blindly
This is one mistake, which beginners tend to do a lot. If you follow the equity market trends without understanding, why the market is moving in a certain direction then you might end up buying stocks at higher prices and incur losses or exit too late and incur losses.
3. Lack of Strategy
Online equity trading requires you to trade with a strategy. Every trader has a strategy, which suits his or her trading needs. An experienced trader will have their concepts clear as to what their goals are, how much loss they can accommodate, what will be their entry and exit points, etc.
4. Lack of a Proper Exit Plan
When you enter a trade, you need to have a clear-cut exit plan ready. You need to know what you want to achieve from the trade. You need to have clarity on the upside and downside of the prices.
5. Inclusion of Stocks in Key Indices
There are many stocks, which are included in the key indices when they have already had a good run. Hence, one should avoid stocks from key indices.
6. Lack of Focus on Macroeconomic Data
Trusting a stock prospect is a good way to trade, but more so as to focus on macroeconomic data. Focusing on macroeconomic data can help you with your trading strategy.
7. Listening To Analysis
Taking help of analysts should not be your only strategy. Equity trading is complex and requires you to have a holistic view. Hence, listen to analysts but also self-study.
8. Ignoring FII Selling
FII selling is gradual. FII selling is an indicator to exit. If you miss identifying this indicator then there are chances of you incurring losses.
These above trading mistakes are some common downfalls through which every trader has been through occasionally. With many Indian share market apps coming up, share market trading is now accessible easily. Make sure you are aware of the above mistakes and avoid them.