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Reasons Why Beginners Fail in The Share Market

Reasons Why Beginners Fail in The Share Market

  1. Don’t know how to choose the right share to buy
  2. Don’t know when to bail out of a losing share
  3. Don’t know when to take profit on a winning share
  4. Don’t Know how to construct a proper portfolio

These are the main reason most people starting out in to stocking trading tend to fail. We will go in to a bit of detail in each of the 4 major mistakes. Hopefully you can learn about theses mistake before you lose your money.

  1. Don’t know how to choose the right share to buy…

How does novices pick what shares to buy amongst thousands of shares? You might choose to listen to your share broker, or listen to your “experienced” relative, or listen to free “share pick” on the internet…etc… and you will end up losing money

Because individual share behaviour is very intricate, only the most professional full-time traders have the right technology to make proper share pick decisions. Such knowledge and technology is simply not available particularly to the beginner trader.

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  1. Don’t know when to bail out of a losing share…

The deadliest killer of beginner traders is not knowing when to get out of a losing share. Too many traders hold on to their shares until it is worth nothing. Most beginners will hold on hoping that the share will stage a rebound because you simply do not have the technology to tell if a share will ever rebound! The only way for a beginner to avoid losing everything is for an expert to tell them when to get out of a trade.

  1. Don’t know when to take profit on a winning share…

How many times have you heard stories around you of people who held on to their shares which made them a lot of money. Then one day, the share turned around which ended up with them making a big loss?

Too many people keep thinking that their winning shares will keep on winning forever and never knew when to take profit… until the shares crashed on them! The problem is again that telling when a share is losing upward drive is very difficult.

  1. Don’t know how to construct a proper portfolio…

Do you know that many shares actually move up and down together no matter what? Do you know that there are shares that totally move opposite to each other? Do you know that many shares actually move exactly opposite to the way the market is moving? Do you know that there are shares that do not ever move? Do you know that there are shares that are on the verge of getting de-listed?

If you do not know the above, how would you ever be able to logically put diverse shares together so that you can make money? What if you put a share together with a share that moves exactly opposite to it? Would you ever make money? That is why a lot of people are turning to trading a much more reliable and much more stable instrument such as the Market Index or Market Index ETF.

 

So, let’s get some Stock trading basics in place and a bit more understanding.  Introduction to Stock Market

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