5 Mistakes in Online Trading

Online trading has grown in popularity in the recent years as more and more people gain internet access.

Trade12 - laptop and data for research
A person is using a laptop with research materials lying around.

People consider online trading more convenient than ordering people through telephone to a broker’s trader in the trading floor. A lot of people find it to their liking that they can control their actions more freely. They can use whichever gadget it is that they have in their arsenal – laptop, cellphone, desktop or tablet – anytime, anywhere.

Read more: Beginner’s Guide to Making Money Through Online Stock Trading

But with online trading, there are still risks that you simply can avoid. And along with those risks, are the mistakes that you have done, no matter how experienced you might be.

Here are some of the errors that veterans and novices alike end up committing in the online trading market:

  1. Trading without strategy

It is never safe to simply put all your trust on unreliable sources. Blind trust is a mistake that a lot of traders make. You need to first make sure whether you are bullish in your risk-taking and understand what will work best for your financial portfolio.

There are other people who can help if you’re still unsure of the strategy that will work best for you. Resources are available online which will take you through technical and fundamental analysis approaches towards online trading.

See the Pros and Cons of Online Trading

  1. Letting your trades stay un-organized

Regular traders know how tedious it is to keep track of their picks of futures, options, currencies, and commodities. The best way to avoid this mistake is to keep track of all your past trades, profits, and losses.

Also, keeping track of the companies you own shares of can help make sure that you are making sound decisions that will help your hard earned money return profits.

Learn more on Steps to Making Money through Online Trading

  1. Trading too often

People usually feel emotional pressure to keep on trading. The pressure can come from others in the market around you or because of the “season” for trading. Despite the reason, you still should focus more on the facts about the stocks before placing a trade.

If you do trade often and it actually is working for you, then there’s no need to feel guilty about it. But if you’re trading just for the sake of trading without having any real reason, there’ll be consequences. Overtrading can impact your returns negatively and it then can be qualified as trading mistake that you should avoid.

Trade12 - lightbulb on with crumpled paper
A lightbulb is turned on and on top of a table next to three crumpled papers.
  1. Too much leverage

A well-known investment cliché states that, leverage is a double-edged sword.

Most people, especially the beginners, get drawn by the degree of the leverage they have in trading. This leverage has the possibility to boost returns or worsen losses, depending on your trade.

Having too much leverage can destroy your trading capital faster than you can imagine. It is not always a good thing to have excessive leverage, and you, as a trader, should know that.

  1. Putting everything in one trade

Most of the times, traders end up putting all their savings on a stock that they think will be able to give them high profits. It is honestly tempting to do just that but it is not highly advisable.

Like we’ve said before, any kind of investment has its risk. This, too, apply to stocks in the market, of course.

The temptation of trading-in-one-go might come to you as a hot tip from someone you know or is close to you. Your instincts might end up telling you to put everything in that one trade. But the age-old financial advice still stands, do not put all your eggs in one basket.

You can earn bigger profits and execute better trades here at Trade12 by reading the latest market updates. Striving to become the best forex broker for you, Trade12 reviews daily market events essential to your trading activities to help you improve your overall trading performance. Register an account now and enjoy a wonderful trading experience!


Leave a Reply