EP 081: 3 Mistakes New Stock Traders Make

In this episode of the money, markets, and mindset podcast we are revealing the three mistakes that new traders make and how YOU can avoid them.

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Most traders fall in love with how much money they can make. However, how much you can make may not be where the stock price can go. Instead, you may want to pick your trades based on looking at the stock chart... Don't let how much you want to make, push you into a bad decision and ignore what the chart is telling you. If you only stay focused on one piece of the puzzle, you may be missing out on the bigger picture. 

This is actually the opposite of mistake number one. Trading always involves some risk, and if you don't pay attention to how much you can potentially lose, you can get yourself in to trouble. The more experience you gain, and the higher returns you get, it can become easy to start ignoring how much money you can potentially lose. You have to get real with yourself and realize that every trade is not going to be a winner. Therefore you should ask, "How much can I comfortably lose if this trade goes against me?"

In the stock market..... cheap is not always good. I'm sure you can think of many other things in life that this saying applies to. In the stock market, quality is sooo important. Most people buy cheaper stocks because they think it is all they can afford.... The reality is that lower quality companies at lower prices don't typically lead to huge profits. Learning how to pick solid companies to invest in will help you play smarter, not harder. Another thing to learn is options trading. This will allow you to control higher quality stocks, at lower prices, like Amazon, Tesla, Google, ect. 

You want to pick your trades based off of the stock chart, not just how much money you think you can make. In addition, you also want to pay attention to how much money you could possibly lose in a particular trade. Remember, this is important because not every trade is going to be a winner. Lastly, avoid buying the cheapest stock or option because you think it's all that you can afford... These three things combined can help save you a lot of unnecessary pain in the stock market. 

So if you don't know how to read stock charts, or how to determine the best time to buy and sell... If you want to learn how to use technical analysis to minimize risk and maximize profits, and how to use options to control higher quality stocks at lower prices, consider joining us inside Power Trades University.