Free Mentoring, How to Increase Your Chances of Winning in the Stock Market

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Q: I have just started investing in stocks because my friend encouraged me to buy a hot IPO whose share price went triple in few weeks. I like the idea of making money from stocks but I am also afraid I may lose a lot when the market turns bad. What are the common mistakes in investing that I should avoid?

A: In investing, mistakes happen all the time even if you already know the do’s and don’ts of buying and selling stocks.

But knowing the mistakes that other people have made can help you lower risks. As a beginner, it is easy to be swayed by the excitement and fear in the market. You need to be psychologically disciplined when you make your investment decision. You can only do this if you know your principles learned from mistakes.

Have you ever experienced regret, even if you have made profit already, because you saw your stock go up further after you sold it on the same day? You must have realized that it was a mistake. Instead of selling it too early, you thought you should have bought more so you can maximize your profits. Correct?

So the next time you encountered this familiar situation, you would double your position in anticipation that the stock will break out, only to find it falling sharply, wiping out all your earlier gains with losses.

This is one of the most common mistakes investors make when they attempt to time the market. In theory, you can predict where the stock will exactly go after hurdling a particular resistance or support level in the chart, but in reality, this does not always follow.

This is because the stock market is primarily driven by emotions. Market traders and investors react to uncertainties and expectations. You will never know how the stock market will behave tomorrow. You can only have an educated clue on what will probably happen based on the information that has been disclosed to the market.

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Great learning from a free mentor. You need a mentor if you want to lower your risk in the Stock Market. Don't do it all alone, you will be tempted by your excitement and fear along the way. With mentors you will learn the discipline in your investment decision.

Happy investing!