I started trading in June and made few mistakes which I lear...
I started trading in June and made few mistakes which I learned my lessons from them. Hopefully by mentioning them here, it helps other fellow traders to learn from them and avoid making the same ones.
1. I was using other platforms to trade passively for many years but when I started to become more active, the difference in commission charges began to make a huge different. Before using Moomoo, for the initial 3-4 months of active trading, the total commission charged was over $3k, which took a large chunk out of the profits I’d gained. Felt like I’ve given my earnings to the trading firm at the end of the day. It was US$10 for each transaction, while Moomoo is a mere US$2+ and with the 180 days comm free trading which I’ve activated recently, it’s only US$1+.
2. Curb your FOMO. When I started, I spent time to research on the stocks and once I’m certain of the stocks, I simply bought in 1 shot and in the end it dropped further before picking up again, in the end earned lesser than could had. So split your purchase into a few batches, so that you can average out price if it falls further. if it rises right away, you may be earning lesser but it’s better than risking to lose much more. Unless you are working in Wall Street, no one can buy in at the perfect timing all the time… No, I stand corrected, not even 1/100 of the time, so spread out the purchase is better than buying 1 shot but of course, your chance is higher when market is just recovering from a downtrend.
3. Be patient. Once I bought in a lot of stocks and market sentiment turned downward and I was scared that crisis hit and continues to fall further and I sold my stocks to cut losses. In the end just a day after I sold, it started picking up and down exceeding way above my purchase price. So main thing to remember is that there is always cycles of up and down trend of the market, so don’t rush in becos of FOMO. Wait for the next cycle and buy in after the market has ended its downtrend, on those that are affected badly but are actually strong. When that happens, you may buy more of your fund.
4. Be rational. Those who follow me know that I am fervor of LCID and it indeed earned me a lot of money but the most recent high price, I spent a large portion of my fund into it despite the fact that it had already risen over 100%. It reached $61 and pulled back to $55 range and I started to buy in more shares again, naively thinking it’s strong enough to continue its strong growth from there. In the end, a series of combo of negative news brought it down to $35+. If I didn’t buy so many shares at $50+ range and get stuck, I would be able to invest in LCID and others at a much lower price when this whole negative market is over. So no matter how confident you are of a stock, don’t spend all your fund into it, expect the unexpected which is actually the norm in the stock market. And definitely don’t use up all your savings to buy stocks!!! Else you might need to sell at a loss when you have sudden need for use of large amount of money.
5. Find the right sources of info. When I started, I gleaned for info from everywhere, subscribed to Zack’s(useless and full of newsletters trying to earn as much from you) and Luke Lango(good enough but risky & must know the right timing to buy their recommendations, mainly early growth stock) and followed quite blindly with mixed results. However that doesn’t mean good info isn’t around, you need to spend time to look for them and so far, I think some YouTubers provide good analysis, some on overall market trend, and others on technical analysis using GMMA ecetera. Likewise don’t just follow blindly, follow them regular and learn each of their strengths and weaknesses(still mere mortals, can’t be perfect right?). Then combine their analyses to make a more accurate decision. Don’t be lazy, spend 1-2 hours daily to watch or read them diligently, nothing is free, definitely not in the stock market. If you don’t, you are gambling more than investing. With time and experience, your skill will increase IF you didn’t lose all of your money yet. Hahaha.
6. When I just started, I was already trading each stocks by the $10k mark without any real understanding and experience. Part of the reason was that the comm was high, so trading too small amount seemed more disadvantageous. So I ended up losing more than I gained and at a higher amount. So unless you are very well trained in finance and stock trading, maybe not even then, you are more likely to lose than gain at the start. So start small first for half a year to learn, opportunities are always available over time. Learn well first with a smaller tuition fee and slowly build from there.
Of course I’m far from being an expert now but at least I’ve learnt to be more prudent and patient, and with some luck and skill, I should be able to gain more and more over time. And I’m still learning as I continue to trade regularly. Hope these will help you avoid these unnecessary pitfalls which I fell into. Merry Christmas all, and a Happy Happy New Year! May next year be one full of opportunities! Enjoy the last days of 2021 and look forth to a brand new year.
Devilton
1. I was using other platforms to trade passively for many years but when I started to become more active, the difference in commission charges began to make a huge different. Before using Moomoo, for the initial 3-4 months of active trading, the total commission charged was over $3k, which took a large chunk out of the profits I’d gained. Felt like I’ve given my earnings to the trading firm at the end of the day. It was US$10 for each transaction, while Moomoo is a mere US$2+ and with the 180 days comm free trading which I’ve activated recently, it’s only US$1+.
2. Curb your FOMO. When I started, I spent time to research on the stocks and once I’m certain of the stocks, I simply bought in 1 shot and in the end it dropped further before picking up again, in the end earned lesser than could had. So split your purchase into a few batches, so that you can average out price if it falls further. if it rises right away, you may be earning lesser but it’s better than risking to lose much more. Unless you are working in Wall Street, no one can buy in at the perfect timing all the time… No, I stand corrected, not even 1/100 of the time, so spread out the purchase is better than buying 1 shot but of course, your chance is higher when market is just recovering from a downtrend.
3. Be patient. Once I bought in a lot of stocks and market sentiment turned downward and I was scared that crisis hit and continues to fall further and I sold my stocks to cut losses. In the end just a day after I sold, it started picking up and down exceeding way above my purchase price. So main thing to remember is that there is always cycles of up and down trend of the market, so don’t rush in becos of FOMO. Wait for the next cycle and buy in after the market has ended its downtrend, on those that are affected badly but are actually strong. When that happens, you may buy more of your fund.
4. Be rational. Those who follow me know that I am fervor of LCID and it indeed earned me a lot of money but the most recent high price, I spent a large portion of my fund into it despite the fact that it had already risen over 100%. It reached $61 and pulled back to $55 range and I started to buy in more shares again, naively thinking it’s strong enough to continue its strong growth from there. In the end, a series of combo of negative news brought it down to $35+. If I didn’t buy so many shares at $50+ range and get stuck, I would be able to invest in LCID and others at a much lower price when this whole negative market is over. So no matter how confident you are of a stock, don’t spend all your fund into it, expect the unexpected which is actually the norm in the stock market. And definitely don’t use up all your savings to buy stocks!!! Else you might need to sell at a loss when you have sudden need for use of large amount of money.
5. Find the right sources of info. When I started, I gleaned for info from everywhere, subscribed to Zack’s(useless and full of newsletters trying to earn as much from you) and Luke Lango(good enough but risky & must know the right timing to buy their recommendations, mainly early growth stock) and followed quite blindly with mixed results. However that doesn’t mean good info isn’t around, you need to spend time to look for them and so far, I think some YouTubers provide good analysis, some on overall market trend, and others on technical analysis using GMMA ecetera. Likewise don’t just follow blindly, follow them regular and learn each of their strengths and weaknesses(still mere mortals, can’t be perfect right?). Then combine their analyses to make a more accurate decision. Don’t be lazy, spend 1-2 hours daily to watch or read them diligently, nothing is free, definitely not in the stock market. If you don’t, you are gambling more than investing. With time and experience, your skill will increase IF you didn’t lose all of your money yet. Hahaha.
6. When I just started, I was already trading each stocks by the $10k mark without any real understanding and experience. Part of the reason was that the comm was high, so trading too small amount seemed more disadvantageous. So I ended up losing more than I gained and at a higher amount. So unless you are very well trained in finance and stock trading, maybe not even then, you are more likely to lose than gain at the start. So start small first for half a year to learn, opportunities are always available over time. Learn well first with a smaller tuition fee and slowly build from there.
Of course I’m far from being an expert now but at least I’ve learnt to be more prudent and patient, and with some luck and skill, I should be able to gain more and more over time. And I’m still learning as I continue to trade regularly. Hope these will help you avoid these unnecessary pitfalls which I fell into. Merry Christmas all, and a Happy Happy New Year! May next year be one full of opportunities! Enjoy the last days of 2021 and look forth to a brand new year.
Devilton
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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newbie8978 : Thanks for sharing.
被割韭菜花 : Thanks for sharing. Are you in Singapore? I'm in Singapore
102473283 : thanks
DeviltonOP 被割韭菜花: Um, I'm in Singapore, a native Singaporean.
被割韭菜花 DeviltonOP: Okay okay
无敌哈哈哈队 : Thanks for sharing
暴王 : Very good point
102959240 : Nice sharing thanks
itakeumbrage : This is interestingly written. Thanks, had a nice read on it. Good luck to our trading journey ahead
Viking2021Empire itakeumbrage: Very true! Great advice, to minimize common beginner mistakes.