Stock trading is a lucrative prospect but one that requires careful utilisation of both time and money. However, most novice investors either end up losing a lot of money or lose interest when they don’t get the expected returns. For that matter, you should know that online trading is not a quick money scheme as some online posts and videos will have you believe. Even when you have read and learned the right theories, making an actual profit from your investment requires time, patience, and access to the right trading tools.
Here are the challenges faced by beginners when trading online, if you see a reason that made you quit, it’s time you reconsidered your choices.
Lacking the Motivation to Trade Online
Sometimes, people wish to do something, just because everyone else in their social circle is doing it. But when it comes to starting up by getting a trading or Demat account and becoming an active trader, they get reluctant or procrastinate. Which, in turn, results in half-baked learning and inefficient understanding of trading concepts, and causes them to lose the motivation of becoming an online trader/investor altogether. To become a stock trader, you need to have the motivation to learn about something as basic as a Demat account to something as advanced as RSI flare zones.
Being Overwhelmed by the Market
Online trading is not just about buying at low prices and selling at high. There are many concepts and trading strategies that come into play when you buy or sell shares online. In their quest to make quick profits, beginner investors often end up implementing every stock trading idea and advice at once. Since the stock market is a dynamic place with new challenges coming your way every minute, it becomes overwhelming to track everything after a while. Eventually, it can lead to loss of money or interest or both. The best course as a beginner investor for you is to learn one step at a time, before getting into the thick of things.
Understanding Conflicting Trading Tips and Opinions
A disadvantage of being a beginner investor is the tendency to rely on anyone and everyone’s trading tips and opinions. However, different things work differently for individual stock traders in this industry. So, the strategy that has worked for them might not get results for you. Applying too many tips and opinions at once can lead to conflict in your trading strategy, resulting in losses. Therefore, sticking to the fundamentals of online trading is the best course of action before you try to implement advanced strategies. More importantly, set your trading goals before you begin trading online to avoid getting side-tracked by opinions and tips.
Overreliance on Do-It-Yourself Resources
There are a lot of DIY resources online that tell you about trading stocks online. However, these platforms or channels do not offer a multi-pronged trading strategy. Their advice is generalist in nature, which cannot take you beyond learning the basics of online trading. Even curated articles and videos tend to leave a lot unsaid and lack the systematic approach needed for learning to trade like a pro. To avoid the struggle and losses that may come with DIY trading resources, consider signing up for an online course in stock trading or connect with your stock broker’s customer support for real-time assistance and learning.
Setting Market-Centric Investment Goals
Nobody can become a pro trader in just a month or even a year. The market is continuously evolving, and so is online trading. It’s a common mistake made by many stock traders that after a point they stop learning. Thinking that you can set an investment goal, and keep getting results by repeating a trading strategy that got results for you in the past can be a big mistake. The moment you lose focus and take your eyes off the charts and emerging trends, you become vulnerable to the market’s worst moods. So, keep consuming relevant media and track the market movements if you wish to succeed as an online trader, and be prepared to keep learning, always.
Concluding thoughts
When you get into an unsustainable portfolio situation, getting back on track is always tricky. However, it’s not impossible, sound trading practices and proper guidance from market experts can help you. In the long run, the key to success lies in having the right approach during the learning process and not repeating the same mistakes over and over again in the hunt for quick profits.