So today we're going to be talking about three of the most common mistakes that I see amongst traders of all different experience levels. Making mistakes doesn't make you a bad person, but continuing to make mistakes? well, that does make you a bad person anyways. the only thing that I ask of you in return for this video is that you hit that beautiful and charming like button. Also, if you see value, go ahead and hit that subscribe button for more short, sweet and simplified videos on how to trade the stock market.

Mistake: Number One is something that I see constantly in the zip trader circle Facebook group and it's very common amongst new traders and this mistake is none other than falling in love with the stock that you're trading. So you know you've made this mistake if you've done one of the following: Number One: bought into the stock because you love the story behind it and you feel like they have such big and beautiful plans to bought into the stock because your buddy Joe down the street said it was a great idea. Three Bought into his stock because a news article told you it was a great idea. Four bought into his stock because you thought that company's banana slicer would revolutionize the food industry.

Bought into a stock because you saw it on a public forum and people seemed excited. Six bought into a stock because you liked this sector that it's in and think that the sector has a lot of potential. And last but not least, bought into his thought because your wife / girlfriend told you she'd leave you if you didn't Anyways, you get the idea. As traders, we couldn't care less about the actual underlying asset.

We only care that people perceive it to be worth enough to push up the price for us. That means that even if there is huge upward potential in terms of holding the stock for years, it doesn't really make a difference for us because of the simple fact that we're not entering the market in order to hold it for years. If we were doing that, that would be invested in not trading. And that's great.

But the focus of trading is profiting off short-term fluctuations in value. The point of investing is holding on to something for a long period of time, regardless of what the short-term fluctuations are. Okay, so a mistake. Number two is holding and hoping.

This is when you buy a stock and then when it doesn't go the way you want it to go, you just hold it randomly thinking that it's going to go up eventually. Even worse, if the stock price starts going down, you start to rationalize holding your position and you find all these rationalizations online. You ask people on the internet, what do you think about X stock and as the stock price keeps going down, you just. you hold that faith that it's going to go up regardless of the actual facts in terms of technical analysis and the underlying asset.

This is something that I see often all across the internet and all across this community. I Personally get messages every day from people asking if they should hold the position and they give me the specific tickers and tell me what they're thinking about it and they're like oh, should I sell out of this or should I hold But the problem is, this isn't the right approach. I Say this respectfully, but if you are asking a trader if you should get out of the position, it is probably already too late. As traders, we need to look at the minute-by-minute movements in order to calculate and assess whether or not we should hold a position.

This involves checking the RSI, the MACD, searching for support and resistance levels, and checking for confirmations, etc etc. But it also misses the point. And that is when you're taking a position, you need to have both an entry and exit plan. That means once you're in the position, you have an exact plan for when you're going to get out regardless of what happens with the share price.

That might mean that your plan is to get out at a certain sign of a reversal such as a closing gap between the SMA and the price action or a closing over the SMA line. Maybe it means when we hit that new resistance level, but a plan means setting a red line of when you're going to get out. If the price action doesn't go the way you want and also setting a red line when you're starting to see signs of a reversal in terms of cutting your profits. So the theme of mistake number two is that holding and hoping isn't a good strategy, but having a plan and executed onset plan totally is.

But if you'd like more tips on how to create a plan I Have a bunch of links in the description below, so feel free to check those out. Creating a plan can be very intimidating for a lot of new traders and that's totally fine. The way to take intimidation out is through education 100% of the time. The last mistake that I'd say is personally identifying with your success rates.

This means that if you're up 40% on a position in a day, that means that you now feel 40 percent smarter. No, you're not any smarter. I'm sorry you just had a good position. Percent increase on a position is really just that.

It does not mean that you are now suddenly a better trader than you were a minute before you took the trade. You are literally the same person. You just have one more ounce of experience in you. This successful trade doesn't mean anything, and identifying it will only prop up your ego to something that can easily burst in a later trade and discourage you from trading for all.

the problem with thinking that you are smarter every time you have a winning position is that once you start losing trades, you're going to have the opposite problem. And thus, you need to note that your skill level within trading is measured 100% by the amount of experience you have, the amount of knowledge you've acquired, and the amount of procedure that you force yourself to stick to you each and every single trend. Your successfulness in trading is not measured by how much you make on one trade, but rather how consistently you can make money over many trades. Moreover, it's about how much better you get every single time you place a trade, how much more you learn, how much more you experience, how much more you understand that things are hyped up and not really overvalued, how much you understand in terms of the overall picture And the theme here is that anyone can make money on one trade.

Anyone could find that one trade that goes up 150% in a day, and anyone can lose a lot of money on another trade. Thus, personally identifying with each and every trade that you make is really stupid and it misses the point of trading altogether. Anyways, guys I Hope this video was helpful. A bonus mistake that I'd like to introduce for you guys.

If I had to put a mistake, number 4 on this list is not joining a community of other traders. This is a huge mistake because if you join something such as Zip Trader Circle, you get access to a lot of the value that other members of the community hold, and you also get to get that that positive sense of community from also sharing your own value. There is no reason to trade alone, so I invite you to go on there and see what we have to offer you. I Also, post lightly watch lists of stocks that are likely to fit the trading criteria in the following day, as well as give you an idea of what to look for anyways.

Have a great day folks and I'll see you in the next video.