6 Common Trading Mistakes That Cost You Money
1. Emotional Trading: Making decisions based on fear or greed instead of following a predetermined strategy leads to impulsive trades and significant losses.
2. Overleveraging Positions: Using excessive leverage amplifies both gains and losses, often resulting in account blowouts during market volatility.
3. Ignoring Risk Management: Failing to set stop-losses or position sizes appropriately can turn small losses into devastating portfolio damage.
4. Chasing Hot Tips: Following unverified market rumors or social media advice without proper research leads to poor investment decisions.
5. Overtrading: Excessive trading frequency increases transaction costs and reduces overall profitability through unnecessary market exposure.
6. Lack of Diversification: Concentrating investments in single sectors or assets increases portfolio risk and reduces long-term stability.