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S wing trading, like any other type of trading, carries some risk with it. Anyone can mess up a trade, but beginners are more prone to mistakes. In this short guide, we will attempt to lay out some common mistakes made by beginning traders and how you might avoid them.

You may be getting into swing trading, thinking that you can make a full-time income. The truth is that you can. However, it’s not something that is going to happen automatically. It takes time to learn the tricks of the trade and to learn how to trade to make profits consistently correctly. You should also not have unrealistic expectations about the amount of money you will earn in the beginning. You probably aren’t going to make a million dollars on your first trade.

Some people view the stock market as a gambling casino. But it’s not a gambling casino at all. They are rooting in the mathematics that underlies the operation of markets. In any case, when you become a swing trader and intend to earn a full-time living from it, this is a business. You need to treat it the way that you would treat any other business. Many new traders think of it in terms of making a fast buck without balancing the books and taking it as seriously as it needs to be taken. If they opened a McDonald’s, they’d be far more careful. You should treat it exactly the way you would if you opened a restaurant or a consulting firm. Most people would approach such ventures with far more care, and if you can do so with your trading business, while you might not make a million dollars the first month, you will be on a sustained path to deriving real income.

Being a successful swing trader requires patience. You will hold onto your investments for several days to possibly weeks, and some swing traders even hold onto their trades for months. This can be difficult for impatient people. Another way that being too anxious can get in the way is that anxious traders simply go out and make trades that feel good but have no analysis behind them. That might work out now and then when you get lucky, but over time, that is a recipe for failure.

This brings us to our second beginner mistake – failing to plan. Before going into a trade, you should study the security you hope to trade and make a plan to carry out the trade. Your plan should include your entry point, how much profit you will take, how much loss you’re going to accept, and your exit plan. You shouldn’t go in on a hunch and should instead study various securities to see which ones will work out to serve your interests the best.

Many people go into trading, thinking that they can get rich quick. This simply isn’t true. Yes, sometimes it happens. But most of the time, it doesn’t. People are surprised to find out that trading takes work and time invested in study. It is not the get rich quick scheme or gambling casino that people imagine. If you are looking for a get rich quick scheme, you are setting yourself up for losses, because your mentality will lead you to try and cut corners in search of profits. When you do that, mistakes are likely to be made.

There is a fair amount of math involved behind the scenes, and wall street is full of people with math and physics degrees that are working behind the scenes on formulas, coming up with new derivatives contracts, or coming up with new tricks like individual moving averages. However, as a trader, you don’t need to get involved at that level of detail. While you will have to get some comfort level with math, it is not necessary to go all in. Take your time and study slowly. Nobody is going to start the first day and understand all the charts and moving averages. However, to successfully trade options, the trader must be able to use and understand the charts. You don’t have to understand how moving averages are calculated, but you need to understand how to look at the charts and understanding what they mean on a practical level.

Swing traders on the stock market have access to leverage. That is, you can borrow from the brokerage at a 2:1 ratio. This can get some people into trouble. There is no faster path to debt than playing with other people’s money. Leverage can also lead some people to take risks that they wouldn’t otherwise take. At the beginning of your swing trading career, you should consider trading without using leverage. Save that until you’re more experienced and less likely to make huge, costly mistakes.

One common mistake made by beginners is to see a buy or sell signal in one indicator and get anxious and either enter or exit their position. Sometimes that will work, but to protect yourself, you need to use more than one indicator before making any moves. The cold reality is that no one indicator is right all the time. When you see a buy or sell signal, confirm it before making your trade.