If you want to make it trading stocks in the market then you will need to be aware of the dangers and common mistakes that the average trader makes when they make their trades.

I’m sure that you’ve heard many times that the basics behind trading stocks is to buy low and sell high. No kidding, I’m sure you already knew that even before those foolish commercials on TV told you that. It’s a little more than just buying the stock at a low price and wait for it to go up in value.

Many times you will get in a stock and afterward you watch it come down in value. That happens more times than I can remember. I’m OK with that because I don’t buy all my shares at one time. If I buy a stock at (100 shares at $15.00) and it drops down to $12.00, I don’t panic, I look to make sure that the company hasn’t done something wrong that would cause the price to drop. If the reason that the price came down was because of profit-takers as well as the market falling and taking my stock with it, I will go ahead and buy my next group of shares in that company. Let’s say I buy another 100 shares at $12, now my cost basis is $13.50 per share. When the stock goes back up to the $15 range or better, I’ll sell 100 shares and keep my core position.

If I was to panic and sell the shares when it dropped to $12, I would have been out $300 (100 @-$3). Patience is a virtue and is a necessity when deal with the stock market.