5 Common Beginner Mistakes in Stock Trading (and How to Avoid Them)

Introduction

In recent years, Singapore has seen a surge in retail investors entering the stock market. From young professionals dipping their toes into equities for the first time to mid-career individuals looking to diversify their wealth beyond CPF and property, trading has become more accessible than ever.

Part of this growth comes from technology. Platforms that used to be complex and intimidating are now available on your phone, with user-friendly dashboards, fractional shares, and even community features. But while this ease of access is a good thing, it has also created a problem: many new traders jump in without fully understanding what they’re doing.

Trading isn’t gambling, yet beginners often treat it that way. Without preparation, they fall into common traps that can cost them thousands of dollars and years of wasted effort.

The good news? These mistakes are avoidable if you know what to look out for. In this article, we’ll walk through five of the most common mistakes in stock trading, why they happen, and how to avoid them.

Mistake 1: Trading Without a Plan

Imagine this scenario: you read on Reddit or hear from a friend that a certain tech stock is “going to the moon.” You rush to buy in, only to panic and sell when the price dips. A few weeks later, the stock rebounds, and you regret selling. This cycle of buying high and selling low is one of the most common traps beginners fall into.

The root cause? Trading without a plan.

A trading plan is more than just a rough idea, it’s a structured framework that outlines:

• Your goals: Are you looking for short-term profits or long-term wealth growth?
• Your strategy: Will you focus on day trading, swing trading, or longer-term investing?
• Your risk appetite: How much are you comfortable losing on a single trade?
• Your rules: When to enter, when to exit, and under what conditions to cut losses.
  

Without these guardrails, traders often make emotional decisions, chasing hype or reacting impulsively to market swings.

How to avoid this mistake:
Before placing a single trade, write down your plan. Treat it as your personal trading constitution, one you’ll stick to even when emotions run high. This discipline helps you stay consistent, removes second-guessing, and builds accountability.

At Heicoders Academy, one of the first lessons in our Trading course is guiding students to develop their own trading framework. It’s the difference between gambling on gut feelings and executing trades with purpose.

Mistake 2: Ignoring Risk Management

Many beginners focus only on potential profit, forgetting that losses are part of trading. The reality? Risk management is what separates amateurs from professionals.

Consider this: you put 30% of your capital into a “hot” stock, convinced it can’t go wrong. A sudden earnings miss wipes out 20% of its value overnight. That single mistake not only destroys a large portion of your capital but also the confidence you need to continue trading.

This happens because beginners overlook key risk management practices such as:

• Position sizing: Not putting too much money into one stock.
• Stop-loss orders: Automatically sell when a stock drops to a set level, preventing catastrophic losses.
• Diversification: Spreading investments across sectors or asset classes instead of going “all in.”

How to avoid this mistake:
Respect the principle of capital preservation. A golden rule in trading is: never risk more than you can afford to lose on a single trade. Small, manageable losses keep you in the game long enough to benefit from wins.

In our Trading course, we don’t just talk about risk management, we let students practise it. Thanks to our partnership with eToro, students can simulate trades, apply stop-losses, and test strategies on a platform trusted by millions worldwide, without jeopardising their real-life savings.

Mistake 3: Overtrading

There’s a psychological rush that comes from making trades. Each click of “buy” or “sell” releases dopamine, creating the illusion of progress. But in reality, overtrading is one of the fastest ways to burn through capital.

Research has shown that retail investors who trade more frequently often underperform both the market and long-term investors. Why? Because more trades mean more fees, more exposure to short-term volatility, and more chances to make emotional mistakes.

Beginners often fall into overtrading because they:

• Feel pressure to “always be doing something” in the market.
• Mistake activity for productivity.
• Chase small profits without realising that transaction costs and poor timing can eat into gains.

How to avoid this mistake:
Shift your mindset. Trading is not about how many trades you make; it’s about making the right trades. Be patient. Sometimes, the best action is no action at all, especially when the market is choppy.

At Heicoders, we equip students with tools to analyse signals, identify setups, and filter out noise. This helps them resist the urge to overtrade and instead focus on high-probability opportunities.

Mistake 4: Not Using the Right Tools

Think of trading like any other craft. You wouldn’t expect a chef to cook a gourmet meal with a broken stove, or a photographer to capture award-winning shots with a faulty camera. Yet many traders handicap themselves by using outdated, clunky, or overly complex platforms that don’t match their level of experience.

The right tools matter. A good trading platform should:

• Be intuitive and user-friendly, so you’re not overwhelmed by unnecessary complexity.
• Provide real-time data and charting tools to support informed decisions.
• Offer community insights or features that help you learn from others.

This is where platforms like eToro stand out. Beyond just buying and selling stocks, eToro pioneered social trading, where you can observe and learn from other investors, and even copy their strategies if you choose. For beginners, this shortens the learning curve significantly.

How to avoid this mistake:
Don’t settle for tools that frustrate or confuse you. Use platforms that are industry-trusted, designed for learning, and able to scale with your growth as a trader.

Through our partnership with eToro, Heicoders Academy’s students gain exposure to a platform that does all this, bridging the classroom with real-world applications in a seamless way.

Mistake 5: Learning Alone

Finally, one of the most overlooked mistakes: trying to learn trading entirely by yourself.

Yes, there’s a wealth of information online, from YouTube tutorials to Reddit communities. But the problem is fragmentation. You may learn bits and pieces from different sources, but without structure or guidance, it’s hard to connect the dots. Worse, you risk picking up bad habits from unreliable advice.

Trading is like learning a sport or musical instrument. Could you teach yourself tennis just by watching YouTube videos? Maybe. But it would take much longer, and you’d likely pick up incorrect techniques that are hard to unlearn. The same goes for trading.

How to avoid this mistake:
Learn in a structured environment where you have:

• A clear curriculum that builds from basics to advanced strategies.
• Guidance from practitioners who have traded in real markets.
• A peer community for support, accountability, and idea-sharing.

Our Trading course is designed with exactly this in mind. Students not only gain foundational skills and strategies, but also benefit from mentorship and community. And with our exclusive partnership with eToro, they’re not just learning theory; they’re applying it on a global platform with real-world relevance.

Final Thoughts

Trading can be rewarding, but only if approached with the right mindset and preparation. The most common mistakes — trading without a plan, ignoring risk, overtrading, using poor tools, and learning alone — all stem from the same root cause: rushing in without building a proper foundation.

The solution isn’t complicated. Have a plan. Respect risk. Be selective with trades. Use the right tools. And most importantly, don’t learn in isolation.

At Heicoders Academy, our mission is to bridge education with application. That’s why our first-of-its-kind partnership with eToro matters so much. Students don’t just sit in a classroom learning theory — they gain hands-on experience with an industry-grade trading platform, while enjoying exclusive perks available only to our community.

Trading in 2025 is about more than just picking stocks. It’s about combining smart strategies, risk awareness, and technology to make informed decisions. With the right guidance and tools, you’ll not only avoid beginner mistakes but also build habits that can serve you for a lifetime of smarter investing.