- News based Trading
Trading on the basis of news is one of the top ideas for losing money via stock market because news is just rumor for the market which might or might not stand true. It is equivalent to gambling.
- Averaging Losses
One of the most common ways of catching the falling knife is averaging out your current investment by making an investment in the loss-making scrips. It totally depends on the type of scrip you are in. Are you averaging out because you have fundamentally believed in that particular stock or you are averaging out as you cannot see your scrip going down so you start speculating?
- Mismatched Risk appetite and Investment goal
Sometimes what happens is you cannot predict your right risk appetite. You might take a higher risk than the actual risk-taking capability. In the event of losses, your financial planning gets disturbed and you end up in debt.
- Speculating rather than Investing
There is a very thin line that separates Investing and Speculation. Risk-adjusted return of Investor is far better than Speculator.
- Transacting on the basis of Tips
Stock Market tips are pretty normal nowadays. Have you ever thought that the person who is giving tip had already made money if he had any? So, believing in these tips is also one of the ways of losing money in the market.
- Execution without plan
One of the point that people realize after taking entry that is an exit. What we usually do is we research a lot about the stock, make a detailed report and take all measures for a good investment. But after taking entry we realize that we have not decided the exit plan.
- Imitating Other Portfolio
Naïve investors or even the experienced one try to imitate the portfolio of renowned investors and they end up making huge losses. Imitating the portfolio is like chasing the Rainbow which you never get in hand.