10 Fatal Mistakes You Should Avoid as a Stock Trader

Stock Market Investment and Trade Strategies - JayceeDeGuzman.com

Have you been contemplating lately on whether or not you’re ready to trade or invest on your own?

I’ve listed 10 scenarios that some of my clients in the Stock Signals Philippines were doing before they became my clients. See not only what was done wrong, but also what could have been done better.

1. You buy stocks without setting a selling price point. It’s like “buy now, worry later”.

2. You bought a stock and you are not sure if you bought it at the right price. Because you were not sure, you did your research but only after buying. Talk about a perfect example of doing things in reverse.

3. You bought a stock just because it was trending upward without checking whether or not it’s expensive. You were confident that a bullish stock cannot be stopped until a massive sell-off happened and you were left at the top.

4. You said you’re a long-term investor. The day after you bought your first long-term stock, it gave you some gains. It was still good to average up, but you did not because you did not want to see your percentage of gains to go down. The next day, the stock price went up by 5%. You snapped your finger and told yourself, “I should have bought more!” Now you’re confused whether you should be focusing on short-term unrealized gains or on the higher upside percentage.

5. You were advised to set a stop-loss percentage. However, instead of asking yourself, you asked other people at what percentage you should be setting your stop percentage. You forgot that your stop-loss percentage is based on your own risk-tolerance and not on someone else’s.

6. You heard that setting a reward-to-risk ratio of 3 to 1 or 4 to 1.5 is a must before entering a trade. Being an obedient trader-cum-learner that you are, you followed one of those two ratios. You didn’t realize that setting a reward of 3 or 4 is above and beyond your stock’s strong resistance level, which has not been broken for a very long time. In other words, you set a reward that is less likely to be reached.

7. On your first day, week or month, you immediately jumped to a conclusion that you would like to be a day-trader. But here’s the problem: you know nothing about technical indicators or chart reading. Worse, you don’t even know how or where to plot a stock’s chart.

8. When you bought your first long-term stocks, you told yourself that you could do long-term investing on your own. However, you didn’t even read the news or the company disclosures of the stocks you bought. You didn’t even know if the companies you bought scored a higher net income than operating expenses.

9. You don’t trade based on informed decisions. If one stock suits your appetite, instead of doing a sound research, you just ask everyone if the stock will still go up without realizing that no one really knows exactly what will happen. You’re asking for certainties when you can only trade probabilities. When your post received three “yes” comments, you buy the stock right away.

10. You bought what the crowd bought. When you incurred losses, you are bitter against the person or group who hyped the stock. Instead of verifying the information you got since it’s not data-driven, you just followed it blindly. Now you’re scratching your head.

What other signs do you think I should add on the list? Comment below.

Jaycee De Guzman


  1. Hi Jaycee, I’m an OFW currently working in Riyadh, KSA and also an investor in the stock market (PSE) for a while now. As an investor, I’ve found your newsletters/articles to be very informative and useful. My next plan is to become a part time trader due to my work commitments/schedules and eventually become a full time trader and investor. Am interested in your Stock Signals services and hope to learn & gain more from it within 3 to 6 months time. Initially, I will subscribe in your STARTER PLAN for 3 months and thereafter, will upgrade to PLUS or UNLIMITED PLAN. Hope you can guide & help me to achieve my financial goals within a reasonable time frame! Thanking you in advance, Ed Ancheta

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