Online Stock Trading Mistakes: Do You Make These?

It is no secret that online forex trading firms offers convenience and greater flexibility for the everyday trader. He or she does not have to contend with the crowds at the exchanges. Due to the improved connectivity of internet and new trading systems, it is now possible to order and trade stocks online.

Traders tend to commit mistakes in rare cases that cost them their money. Even though trading systems provide a completely independent and stress free experience for traders, this does not mean they can be ignored. This system operates on the rules set by the users, so you should check in on it regularly. Take a look at these common online trading mistakes.

Mistake No. 1: Believing the notorious BTST

As a Trader, you’ve probably come across the expression BTST. This is a term that brokers often use to explain to traders how they can increase their profits without increasing the risks. However, this is only a means to conceal any potential losses the broker may incur. You are exposed to risks because you have signed a large list of potential risk factors.

Understand that brokers will encourage you to do this type of trading, as it earns them commission every day. You can wait up to two days and they only receive one commission, but if every day you purchase and sell you will be paying commissions on a regular basis. BTST does not make sense and is something you should avoid. Why do you have to take the entire risk when you’re trying to decrease it?

Penny Stocks Temptation: Mistake No. 2

The low price of penny stocks can be attractive, but the prices are often a sign of a lack in interest. Most penny stocks only come into action when certain promoters are trying to manipulate their stocks by using coordinated efforts. You can only expect penny stock to be active during this period, because they’re usually dormant.

Trading is often misled by sudden tips and suggestions that support penny stocks on the internet. The low price of these penny stocks makes them appear to be a great investment. Don’t fall for this trap. It will cost you money.

Mistake 3: Participating in a morning frenzy

It is important to maintain control of yourself in order to prevent any early morning panic. To be successful in stock trading you must dedicate your time and effort to the activity. The morning order is not enough. After the night report, you can only make a few more orders.

It is the long list of pending order that was placed the previous night, and then these orders start to flow in the following morning. This surge in orders and news will not affect traders who are experienced. Most likely, if this is your first time trading, you will have already made an order. Such orders will be subject to significant price fluctuation.

Conclusion:

These mistakes are common, and include relying heavily on software systems without spending sufficient time optimizing their trading strategy. However, these three mistakes show that the people who start trading incorrectly and using systems the wrong way will face problems. You should have some idea about what you need to avoid now that these mistakes are discussed.

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