2021 is about to end. For the last few months, more than 40 lakh investors have entered the stock market intending to create wealth or an additional source of income. However, according to various sources, not more than 20 per cent of the investors could attain profit at the end of this year.

Reason? Most traders who try to make quick cash in the market lack the skills & patience to study stocks or securities in detail. Also, many of these investors, primarily new in the market, might have faced behavioral biases that create complexity in making trading decisions.

From intraday traders to value investors, serious stock market players invest a large portion of their time analyzing market trends, charting patterns, and other multiple factors to make a sound investment decision.

That is why Warren Buffet, a remarkable renowned investor in the world, once said- Read five hundred pages like this every day- while pointing a book in a school conference. He further added that's how knowledge works. It Builds Up, Like Compound Interest. 

Mistakes are common while investing, but few of them can be easily avoided, if we carefully look at them. Here are four common yet blowhard mistakes that one needs to tackle instantly:

Trading without a plan sounds similar to boarding a train with an unknown destination. The first question an individual should ask himself is why he is trading?

For instance, if you are looking for an alternate income source or want to save for retirement, you may choose mutual funds schemes that suit your goals and budgets. It is essential to have an objective to succeed in your trading plans.

We recommend you pen down your knowledge, the type of trade you are confident with, and the time you can commit to trading. It will help you define your target and work on it accordingly.

Often, we get affectionate with the work and hours you have dedicated to achieving success. Likewise, as an investor, you may have experienced a sequence of profitable shares that helped you grow in your career.

However, there are times in the stock market when the bull market is out of breathing, and eventually, the market starts a downtrend. This is the moment when you need to control your emotions and think from your mind.

In such a scenario, try to temper your sentiments. Perform your research, study charting patterns, and gather your insights. However, we recommend you never trust your guts. Instead, make a decision based on price movement and market trends.

In our school days, we recorded our day-to-day activities in a diary. It helped us remember our daily tasks and complete them on time. Similarly, if you are a trader, especially new in trading, it is advisable to maintain a trading journal.

Create a trading journal on MS-Excel. This software can create different sheets for different trades and make your recording easier. You can enter data in the columns, insert charts, and insert comments using text boxes.

A trading journal will enable you to monitor all your trades. Here, you can grade your trades on a scale of 1 to 5 based on their performance and why you selected them.

Some essential information that your trading journal includes are:

- date and time of trades you purchased.

- screenshots of the chart pattern for everyday

- your thoughts and reasoning for buying/selling trades

- future prediction of the trades

If you are making this mistake, Welcome To The World of Trading!

In the stock market, timing is everything. Letting a good trade turn into losses is the most painful and major mistake one makes while trading through financial instruments. 

To avoid these blunders, we should carefully examine the market trends and follow the trades. It will enable you to track the price pattern and predict the future plans to exit or enter the market. While monitoring the price pattern, make personal notes of:

- Profit Target (s)

- Risk/Reward Stop (s)

- Tight Trailing Stop (s)

Create a trading strategy where you risk only 3 to 4 per cent of investments in risky trades and the rest in debt instruments.

Making mistakes is a part of the investing process. All you need is to learn from the blunders, move on, and never repeat them. We recommend developing a thoughtful and systematic trading strategy to avoid committing these mistakes. It will help you create a roadmap of your trading journey and track your progress accordingly.

We hope our article helped you get answers to what you were searching for. If you are facing any other problems while trading, drop your comments in the below box. We would be happy to help you!