Retail Trading, and its more sinister cousin, day trading, has witnessed an explosion in recent years, with millions trying their luck in the “lucrative world” of trading equities, currencies, derivatives, and more.
Retail traders often enter the markets without sufficient research and education. They may rely on tips from friends or follow rumors without understanding the underlying fundamentals or technical analysis of the securities they are trading.
One of the retail traders' most significant mistakes is not implementing proper risk management strategies. Risk management is crucial in trading, as it helps to protect your capital and minimize potential losses.
Many retail traders fall into the trap of chasing trends and neglecting fundamental analysis. They may buy into security simply because It has been trending upward or selling short because it has declined.
Overtrading can lead to increased transaction costs and decreased profitability. It is important to focus on quality over quantity and only trade when there is a high probability of success.