The 5 Deadly Trading Mistakes That Can Cost You Your Life Savings

While really great traders like Warren Buffet can make trading look easy, for the rest of us its definitely not.. It involves a lot of knowledge and experience and if you don't have any formal education it can be a steep learning curve. Nevertheless, many hugely successful traders are self taught. No doubt they will all tell you how they lost a small fortune before they started turning things around. With online trading there is just no substitute for experience. You simply have to get that first hand knowledge that not even the best books in the world can give you. Fortunately we can learn a lot from others mistakes. Here re some of the most fatal mistakes in online share trading. 1. Chasing Stocks When you start going after stocks because you like it or have heard about it you are probably going to chase it all over the place - always hoping that it's going to make a move. Hoping that a stock will make a move is definitely not a wise way to trade. Instead you should always trade on facts. Trade on signals that tell you a stock is about to move and don't chase rumors. They are almost always wrong. 2. Trading With Scared Money What money are you trading with? Is it your family's life savings or even your retirement fund? The golden rule is to never trade with money that you cannot afford to lose. If you are afraid of losing you will bring the wrong mentality to your trading and trading with scared money is a recipe fro making scared decisions. 3. Holding On We all know that holding on to a losing trade is a dumb idea. The problem is that when we have a stock that we believe in we tend to hope that it will do what we want it to do. This is the mistake that has seen many traders hold on to a losing stock way longer than they should. It's very important to set you enter and exit points on every trade. If you have to get out! Cut your losses as soon as possible. 4. Hunches Trading on hunches or "gut feelings" is probably one of the biggest mistakes that beginner traders make. Great traders never trade on hunches, tip-offs and gut feelings. Yes, gut feelings are important, but a great trader allows the facts to guide him. If you have a good feeling about a particular stock, by all means go with it but makes sure you go and analyze it and see if there is real value or not. You may get lucky every now and again, but in the long run you have to be smart. 5. Being The Lone Ranger Locking yourself in your basement when you are trading is not a wise way to do it. Learning from other traders is vital to be successful. We learn an immense amount from others who are in the same boat. With the numerous online forums and even podcasts and YouTube videos there's no excuse to go it alone. Attend as many seminars as you can. Read as many books as you can and keep learning - especially from others. This is one endeavor where you want to swallow you pride and get all the help you can.

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