In my small unique book "The small stock trader" I also had more detailed overview of tens of stock trading mistakes:
- EGO (thinking you are a walking think tank, not accepting and learning from you mistakes, etc.)
- Lack of passion and entering into stock trading with unrealistic expectations about the learning time and performance, without realizing that it often takes 4-5 years to learn how it works and that even +50% annual performance in the long run is very good
- Poor self-esteem/self-knowledge
- Lack of focus
- Not working hard enough and treating your stock trading as a hobby instead of a small business
- Lack of knowledge and experience
- Trying to imitate others instead of developing your unique stock trading philosophy that suits best to your personality
- Listening to others instead of doing your own research
- Lack of recordkeeping
- Overanalyzing and overcomplicating things (Zen-like simplicity is the key)
- Lack of flexibility to adapt to the always/quick-changing stock market
- Lack of patience to learn stock trading properly, wait to enter into the positions and let the winners run (inpatience results in overtrading, which in turn results in high transaction costs)
- Lack of stock trading plan that defines your goals, entry/exit points, etc.
- Lack of risk management rules on stop losses, position sizing, leverage, diversification, etc.
- Lack of discipline to stick to your stock trading plan and risk management rules
- Getting emotional (fear, greed, hope, revenge, regret, bragging, getting overconfident after big wins, sheep-like crowd-following behavior, etc.)
- Not knowing and understanding the competition
- Not knowing the catalysts that trigger stock price changes
- Averaging down (adding to losers instead of adding to winners)
- Putting your stock trading capital in 1-2 or more than 6-7 stocks instead of diversifying into about 5 stocks
- Bottom/top fishing
- Not understanding the specifics of short selling
- Missing this market/industry/stock connection, the big picture, and only focusing on the specific stocks
- Trying to predict the market/economy instead of just listening to it and going against the trend instead of following it
I hope the above small article was a little helpful!
Mika (author of "The small stock trader")
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.