It’s said that 85% of people don’t make money trading stocks. Even someone as brilliant as Newton wasn’t spared. That’s because trading isn’t just about technicals and fundamentals—it’s a game of human nature.
Let’s take a look at the five key habits that lead to losses. Which one sounds familiar?
1. FOMO: Sell and then buy again—and always go all-in, never holding cash
The moment you sell, you’re itching to buy something else, afraid of missing out. This is classic greed. But remember: as long as the market exists, opportunities will always come. Ironically, when the real opportunity does arrive, you probably won’t have any cash left.
2. Wrong take-profit and stop-loss method: Take quick profits but hold onto losing trades
This is a classic retail investor trap—taking tiny profits out of fear, and holding onto losses out of hope. It's a short-term, impatient mindset. When a stock drops, many console themselves by saying, "It's not a loss if I don’t sell." But if the fundamentals have changed, getting out sooner means losing less.
3. No patience: Think the stocks you don't buy is better and then switch
Sometimes when you buy a stock during its consolidation phase, but feel frustrated when it doesn’t rise. Meanwhile, watching other stocks soar feels unbearable, like you're missing out while others cash in. This leads to constantly jumping between sectors, chasing heat—and usually, compounding losses.
4. Buy penny stocks: Ignore market leaders and chase cheap, speculative stocks
People love “bargains” and cheap stocks, fantasizing about catching a turnaround or reorganization that makes a penny stock soar. But the truth is, leaders are leaders for a reason. Speculative stocks rarely become leaders. Buying them is like betting on a miracle.
5. Betting on the small odds: Catch falling knife
It feels smart to buy something that's fallen sharply—like you’ve found a bargain. But that’s just self-deception. If the bottom hasn’t formed, the dominant trend is still down, and you’re likely catching a falling knife. A 50% drop can still become 80%.
Many people feel personally called out by this list—and that’s the point. These are the traps of human nature. To succeed in the stock market, you must learn to rise above them.
What do you think is the hardest emotional bias to overcome in investing?
Which bad habit do you have in your investing?
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Comments
我承认我也陷入了过早获利了结,同时持有亏损交易太久的陷阱。通过说“它会反弹”来证明损失是合理的很容易,但这通常只是希望在说话。现在,我试着更多地关注实际的基本面,并坚持我的止损。
总的来说,我意识到交易更多的是管理情绪,而不是分析图表。认识到这些坏习惯帮助我变得更加自律——希望随着时间的推移,我能获得更多的利润。
@Tiger_comments @TigerStars @Tiger_SG
I prefer to go for blue chips as they have proven themselves. however, there were times where my itchy hands tend to buy those "cheap" stocks (normally 52 weeks low) with the intention of selling them when they rise. thing is, when they rise emotions get the better of me thinking perhaps they may rise further and start holding onto them. till somehow I get "bonded" with the stocks... that isn't good, is it [Doubt] [Doubt] [Doubt] dangerous to get "bonded" with stock...
It’s said that 85% of people don’t make money trading stocks. Even someone as brilliant as Newton wasn’t spared. That’s because trading isn’t just about technicals and fundamentals—it’s a game of human nature.
What do you think is the hardest emotional bias to overcome in investing?
Which bad habit do you have in your investing?
leave your comments to win tiger coins~
One of the best examples is Top Glove $Top Glove(BVA.SI)$. This stock is particularly popular during the Covid 19 Pandemic. However its share price has dropped like a rock to the bottom of the ocean.
I should have sold my shares of Top Gloves when it was riding high, but I held on till now, as a reminder of my loss aversion bias when the tide reversed for the stock.
So now I have learnt a valuable lesson on loss aversion and being aware of it helps me to recognise when I am falling into its trap.
@Tiger_comments @Tiger_SG @TigerStars @CaptainTiger @TigerClub
hope I have more patient with better holding power for great companies
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