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MAJOR DIY MISTAKES


Anxiety and stress are the main reasons for mismanagement of our trading in financial markets, often so we are led to have negative thoughts and make 3 mistakes that can become fatal.
Often in a rush to have easy gains people are led to do-it-yourself (I call it as you know BricoTrading) relying on scam brokers or even worse listening to calls from call centers that promise stellar gains , while the correct solution in our opinion goes in a completely different direction. That of planning and study.

Planning means changing our habits, trying to follow more knowledgeable people and being followed in the best way possible while avoiding these mistakes, which are:


– Risk aversion and the ability to understand the risk of what one is doing.
– Overconfidence in one’s own abilities (the wolf of wall street effect)
– Read and research only the information that reflects our ideas.


-Awareness of risk:
Often in times of crisis, the novice investor seeks short-term solutions thinking it is the easiest path to follow and also the most profitable. On the one hand exploiting high volatility can make excellent performance (you have to know how to do it) but not being able to exploit this factor will only make things worse.
Italians hold massive unearned cash (about 1.5 trillion euros, more than a third of the entire financial wealth according to Bank of Italy) or in real estate (almost 60 percent of the total wealth, compared to others we are one of the first countries in this statistic ).
Yet people prefer to hold cash in this way rather than make thoughtful choices. Financial markets are the most effective tool for making investments by now having extreme ease of entry and exit from them with fairly negligible costs.


-Trust
Many studies have shown that our mind at the first trade gone in profit creates a “the more I click and the more trades I make, the greater my gain will be.”

Here this is a very big mistake and to be avoided in the most absolute way possible, better a few trades but made with a profitable method!
In March 2020 with the increase in volatility we saw a growing retail investor interest in particularly volatile assets just thinking they would make quick and easy gains (see subzero oil).
A speculative(cfd) mode of investment that is often leveraged with small accounts, typically do-it-yourself and in the long run causes 80/90% of investors to lose, unfortunately discouraging many from doing this wonderful work anymore.
Online trading platforms and brokers, in their communication approach, do not help to raise awareness of the risk around this world. We often witness brokers who are not even authorized to do business in Italy not having any license!

-Finding information to ascertain our ideas
People search for evidence to their investment ideas and look only at the side they are comfortable believing and do not objectively analyze the negative information they find.
Statistically in the investment world, the assumed idea of where the markets can go according to our ideas is a mistake that in the long run kills sentiment toward the markets (thoughts of conspiracies,rigged markets, etc.).
What can be a remedy to avoid these 3 mistakes?
Having constant support remains the best thing when you are a newcomer. In addition to this having a direct relationship helps a lot to not feel at the mercy of the markets and especially to better understand with a close team of people the moves of the markets.

Since March we have gone out and helped many people avoid big losses (oil, wirecard, herthz, nasdaq short and many others) and we are satisfied that we have created a community that now day by day is becoming a real school of trading but especially of life!


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