The most common trading error is not using a trading plan.
Before even starting trading, a trading plan should be developed. The trading plan should definitely include information about when to buy and sell a stock. Especially the selling is important. This is the point where most traders fail. By not determining a selling point before starting to trade.
A trading plan can be quite plain or it can be very complex. This is something that every trader has to determine for himself, if he wants it plain and simple or complex. Mostly a plain and simple trading plan will do. And is probably even better than the complex one, since when it really get’s hot and you are losing money, simple rules makes it easier to know what to do at that moment.
How to construct a trading plan can be found in many places. Forex trading secrets is one of them. There are also some books on the market that describe how to make a trading plan.
It is important to make the trading plan in writing. Otherwise it’s not really a plan, it’s only wishful thinking. And of course, you have to have the discipline to follow your plan. This is the next most common trading error. Not following the plan. Then it doesn’t matter how good the plan is, if you are not going to follow it anyway.
Determine what you want to reach with your trading. How large risks can you handle? Can you afford losing all your money, or only a portion of it? What is the time range? All these questions have to be answered before writing the plan.
To be able to make good trading plans, it is a good advice to look at what other people have done. Try to find about about the forex trading secrets, and you will learn to write profitable trading plans.