With mobile banking and trading apps such as Robinhood, Questrade, and Coinbase it’s never been easier to trade stocks, crypto, or options contracts. This has led to a surge in the amount of retail traders entering the market. Unfortunately, most of the new retail traders that enter the market, tend to overestimate their abilities and get themselves into trouble.

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lack of research and training

Since new traders/investors are unaware of how little they know about the stock market, order types, or about risk management, they will eventually take losses that will ultimately discourage them from trading and/or investing in the future. This area of naïveté is referred to as “unconscious incompetence” in the Four Stages of competence model.

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If you’re smart and decide to take the Marketmaster course before investing your hard earned money, you will quickly recognize how little you know and will start to develop a level of "conscious competence." Eventually, with enough education and practice you’ll be trading without giving it any serious thought. At this point, you have gained "unconscious competence."

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Don’t become another statistic, take the right steps and learn the fundamentals before jumping into the market. Learn basic investing strategies like how to read charts, how to place orders, how to mitigate risk, and how to manage your emotions so you can give yourself the best chance of success.

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the wrong mindset

All the technical analysis in the world will not help you if you approach trading with the wrong mindset. Learning to control your emotions during periods of uncertainty will help you develop the discipline necessary to make poised decisions. While others are panicking, you’ll learn how to make consistent, logical decisions because you have developed a long-term outlook on trading and investing.

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chasing quick wins

It may seem counterintuitive to think that you can go broke taking small profits, but it’s true. If you’re only taking little profits, it only takes one large loss to wipe out all the work you’ve done! A loss like this will be extremely detrimental to your confidence and your progress as a trader. If you want to be successful, you’ll have to learn how to hold onto your winners, and potentially, even add to them. Learning to turn a good trade into a great trade will allow you to withstand any losses you may accrue throughout the year.

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trading is hard

Unlike many other professions, trading is unique because you can get rewarded for making a bad trade whilst taking a loss on a good trade. This makes the learning curve a little more difficult because the lines of what is right and wrong aren’t always clear. Also, the market can remain irrational longer than you can remain liquid, potentially shaking you out before things turn in your favour. This can be discouraging to a lot of people as good trades often take weeks, months or even years to work out.

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There are many ways that novice traders can lose their money while trading. Most of these are completely avoidable and that is why it is so important that you invest wisely in your trading education. This is a lifetime skill that will help you build the lifestyle of your dreams – don’t rush it! Take your time, invest in a trading education and reap the rewards over the long-term.