Hey hey, what's up my friend, so in today's episode right i want to talk about the top six right stock trading mistakes. You must avoid number one. You try to buy low and sell high in the stock market. So let me explain what this means.

So when a stock has fallen in price, maybe at the 52-week lows right at multi-year lows - and you think, oh man, right now, the price is cheap man. This stock is cheap. It has to go up higher. What goes down must go up.

What goes up must come down. You know this type of you know, uh, saying right, this type of quotes that you know justify your buying decision, but here's the thing right, based on my research, that i've done stocks that have you know, fallen price like no 52-week lows. For example. These are stocks right that tend to underperform the market right, there's a reason why stocks are trading near 52-week, lows near multi-year lows is because fundamentally right, those stock sucks.

Okay, of course, there are stocks out there that eventually rebound back higher right from the lows they rebound back to the highs, but we are talking about probability more often than not right stocks that are lowly priced stocks that have you know fallen a lot in price Tends to remain low and might even get delisted altogether. So what should you do in the state? Well, the solution is to buy stocks which show signs of strength, look to buy stocks, you know at 52-week highs, buy stocks and you know trading near multi-year highs. These are stocks that are having better odds right to beat the markets again. I've done you know a statistical research on this and it's far more profitable to buy strength in the stock market market.

So i compared to buying weakness. Okay, so that's the first thing right avoid trying to buy low and sell high number two long stocks right when the overall market is bearish. So, let's say, for example, you, trade, the u.s stock markets and the s p. 500 is, let's say, uh below the 100 week moving average.

It's in a downtrend, then guess what? If you were to buy stocks when the overall market is in a downtrend, you're kind of like fighting against the tide? Right, as you know, right a rising tide lifts all boats right and it's true in the stock markets. If the overall stock market is bullish, most stocks right, they will continue to trade higher and if the overall market is bearish, more stocks will continue to trade lower. And the simple thing is that if you know that the overall market is bearish right, you want to avoid buying stocks hold on to cash instead. So this way you don't have to swallow, and you know and deal the drawdown and one way to define right whether it's the overall market, bullish or bearish is just use a simple tool like the 100 week moving average.

If the stock market index is below the 100 week moving average, then we can see that market is bearish and, let's you know, sell all our positions and remain in cash. So this one technique right will be able to help. You avoid those painful 40. 50.

60 roll down when the market collapse or when it goes into a recession. Okay, next one number three right: the mistake to make is that you don't want to go all in into your stock, no matter how confident you are never go all in into one stock. Why is that? Because you never know what goes on behind the scenes right, the technical could be good. The fundamental could be good right, but if the management run is it's it's it's bad right.

You you never know they're, not gon na you know give you a phone call: hey reyna, you know things are really bad down here. It's time to sell the stock. No all right! Who am i i'm nobody and i'm pretty sure you are nobody as well and nobody's gon na call you and let you know that you know things are really bad inside. So this is why you never go all in into one stock.

Even warren buffett, for example, right from what i last checked, his portfolio has like 40 plus 50 stocks. This is the world's best investor. Okay, manages a ton of money, have pretty much contacts, uh insider excess that we all don't have, and he still doesn't go all into one or two stocks. Yeah he's diversifying across a basket of stocks because you just never know which other ones that are going to be.

You know uh the mega winners and which are the ones that you know it's time to cut the loss and move on okay. So here's the thing right when you trade stocks never go all into one stock. Now you want to trade, multiple stocks, if you can mod across multiple industries as well. So that's the third thing never go all in into one stocks.

Number four, no plan for exit. So when often right, when traders investors, they buy a stock they buy usually based on you know, uh market sentiment. When market is bullish, everybody you know putting money into the stock markets. Right stock goes up, all is happy, and when do they sell the stock? Well, they still sell the stock only when the stock price has collapsed.

I'm not sure if you know you encounter that, but the only time when you sell is when your stock has dropped 30 price 30 40 and you start to panic. Oh man should i still continue holding or should i sell and you usually you would sell right if the stock price continues lower and a simple way to avoid. It is again right. Have a plan exit ahead of time know when you're gon na sell the stock before you buy it, because once you have a plan exit right, then you'll never get caught off guard again and always sell when the price has bottom out.

When you can no longer take the pain anymore, that's what a lot of people do right when they sell stock, it's usually when they can no longer take the pain they sell it at the bottom, when nobody is left to sell market rebounds and rarely hire. So if you have a plan exit like maybe a trailing stop-loss or a fixed target that you have, you know based on whatever valuation matrix that you're using right, you can sell it at a pre-determined price that you have right and you don't have to suffer that. That you know uh selling at the worst possible price scenario: okay, next, one fifth, one! You get swayed by news and opinions. So here's the thing right: stock, there's a lot of news! There's a lot of opinion out there for every stock.

You can find bullish news. You can find bearish news on the internet, and here lies the problem when you got so much news out there. How do you make sense out of this madness if you're, a technical trader is like you know, giving you right all the technical trading tools from a to z, rsi, stochastic, macd price action, chart patterns, candlestick patterns, trendline support resistance, etc? How do you know which tool to use or focus on, and this is the same problem as using you know, relying on news, opinions and fundamentals right there are so much out there. You can easily get swayed right by different news and opinions right depending who is bearish and who is bullish.

So your job as a trader or an investor is to filter down the news that you're using. If you use news in your in your own trading or investing decision, you must filter out the type of information that you use to make your buying and selling decision right. I can't say you know, which is the best, because i don't use uh news at all. In my own trading, but if you do right, you must filter them and only use the ones right that are relevant to your needs and ignore everything else.

It's like trading right using you know, uh technical analysis. I don't use everything and anything right. I simply use a few proven techniques and concepts that has worked for me and i pretty much ignore everything else and whether you're a fundamental guy, a sentiment guy or whatever guy you have to do the same thing. You have to discard the noise and just focus on the stuff that matters to you to you.

Okay, so don't get swayed by news and opinions, because most of them are pretty much irrelevant and the last and final thing is that you are trying to short stocks. Now, there's nothing wrong: shorting stocks. There are traders, i believe right who are profitable doing this in the long run, but here's the thing right. If you're new to trading and you're trying to shop the stock markets, you are fighting against the time because in the long run stock markets they are in an uptrend just pull out any.

You know stock market index over the last 30 40 years. You can see that you see the long term uptrend so by trying to short the stocks out there. The stock markets you're kind of fighting against this long-term trend, not that it can't work right, but the odds are against you. So if you are still trying to make money from the stock markets, my suggestion is to either keep on the long side or hold on to cash.

Don't try to short the stock markets because again, in the long run, it's usually in a long term up trend and usually when there's retracement, there's pullback right, uh, usually the steeper the pullback, the steeper, the retracement, the stronger, the subsequent rally. So if you're trying to short stocks, you shot it too late and you get caught off guard right on the uh, the bounce higher. It's going to be painful for you, okay, so that's kind of a another tip that i have for you. So it's a quick recap: uh, six things to avoid when you're trading stocks number one uh avoid buying low selling high number two don't buy or don't go long.

When the overall market is bearish, number three don't go all in into one stock number: four uh! Don't trade without a plan exit number five, don't get swayed by news and opinions, there's a lot out there, but you must really focus on the stuff that matters to you and number. Six right don't try to short stocks, and if you want to learn more about stock trading, you know having a proven stock trading system that works. Then you might want to check out this uh, this trading booklet, that i've got over here called the pullback stock trading system, a 31-page trading booklet where you'll discover a simple stock trading system that works uh. This system has generated about 1 451 uh since 2000 and over the last 20 years, had about 18 winning years.

So, if you're interested in this system right i'll put the link below this video, you can check it out and with that's it. I wish you good luck and good trading. I will talk to you soon. You.