Dubbed as the ‘Asian Tiger’, Malaysia is a country situated in Southeast Asia and is one of the most progressive nations in the world. Malaysia has a very vibrant, thriving and profitable commerce sector with an immense number of foreign and domestic firms that conduct their operations there. For those who are new to trading or those looking to improve their existing trading skills, succeeding in this sector may sometimes prove difficult because of errors committed by traders.
Trading mistakes can be especially devastating because they don’t only affect your performance but also damage your credibility as well. If you wish to succeed at trading, you must learn from your mistakes so you won’t repeat them again and instead focus on what goes right with your decision-making process.
Here are some of the common trading mistakes to avoid for Malaysians:
Accepting Losses Too Easily
Like any other competitive field, losses are part and parcel of trading. The most important thing is how you react to them. If you can’t control your emotions when you lose money, you might give up on trading, which could be detrimental to your career as a trader. However, it’s still possible to recoup some of those losses even if things don’t go as planned by using risk management strategies that involve cutting your losses early or setting stop orders.
Using Leveraged Trading Accounts Unsafely
Traders use leverage to amplify their gains, but more often than not, they don’t understand how to use them properly. Remember that leverage is only beneficial if you know when to use it and draw out of it. If you’re not careful, you might end up losing everything if the market goes against your position in any way.
Thinking Your Position Will Recover After You’ve Eaten or Drank
After a long day at work, it’s normal for people to want to relax by having something to eat or drink, but this can be very dangerous if you happen to do this when trading stocks because there’s no telling when the next pop may come along and ruin your entire position. Avoid doing things like eating or drinking when you trade; otherwise, these actions can lead to significant losses in your portfolio later on.
Failure to Track Your Positions
Tracking your positions helps you monitor how your trading progresses and makes it easier to maintain a steady income from trading. Failure to track your positions can lead to huge losses, especially if the market starts moving against you without letting you know about it. You need to have a system that automatically tracks every position in your portfolio to handle everything efficiently.
Making judgments based on the news
Judgments made by people about companies and securities are often wrong as they do not consider an overall market outlook. At times, a few days’ positive or negative market movement may have nothing to do with a particular company – it only means that traders have been positioned so strongly for or against a stock that they continue holding onto their positions even if the fundamental support for these positions disappears.
Trading without a plan
When one starts trading, one must have a plan to follow. Each trade needs to be planned according to the trader’s goals, risk appetite, and time availability. A trading strategy should be clear before execution of each trade: what type of trades (short or long), when (what time of day), where (from which online brokerage), how much (how many units of the stock), why (only buy good companies with good fundamentals). This approach will save you from making mistakes and ensure that you’re able to continue trading even during periods when the market seems irrational.
Trading Takes Time – Patience is Key!
Your expectations of excel at trading should be realistic because nothing ever goes according to plan all the time. If there’s one thing Malaysians might struggle with, it would be their patience levels, as patience isn’t something Malaysians are known for. You have to remember that success is just around the corner if you’re willing to be patient and persistent in your efforts(read more here).