Error № 1. Purchase of last leaders of the growth which has recently fallen:

This error is a consequence of greed of the trader-beginner. Not the secret, often he comes to the market, having heard about the super profits received from phenomenal growth of the Internet companies. Having got acquainted with the graphic analysis, such trader closely looks at such actions, as YHOO, AMZN, AMCC, JNPR, WCOM, LU, QCOM. Mentally he sees on that what he could have, if he has bought these papers in 98, 99 or even in 2000. Therefore no wonder that to him all same movements to transcendental heights where will be seem the super profit are taken. These sensations support a steady myth that “the prices always come back”. But hardly now such rule operates with former force.

Now we deal absolutely with other market: the world has changed, it was overflowed by high technologies, truly to estimate which frequently it is simply impossible. Therefore rules, true for General Electric (GE) cannot be true for Yahoo. Definitely, more “civilized” market in this respect is the market of commodities – on it at us much more chances that the price for the goods strongly will not fall below the long-term historical minima.

In the share market it is necessary to remember always: if the price for any reasons has strongly fallen after strong growth, means, for this purpose there were weighty reasons. And they can have such consequences which will lead our investment into purchase of actions to full depreciation, namely – to zero. If you think that it is a rarity is mistaken. Any business has the beginning and the end, and in our superfast century all is considerably accelerated, therefore silly to count on fast restoration of positions of the companies which have lost the position.

Rejecting aside a fundamental sight, it is possible to formulate a substantive provision for the actions which have strongly gone down in price after phenomenal launch: the price should move and show “vivacity”, instead of be in stagnate condition. In case of “vivacity” of behavior we still can hope for quite good movement upward, but at obvious stagnation hardly such is possible – here there is no sufficient impulse and force of movement so necessary for us. Certainly, the action is capable to grow for 30 and 50 percent in short time intervals, but danger of loss of positions is extremely great. But as a whole, similar papers for certain will pass through the long period of a finding in a stage of the depression, capable to last months and even years before will start to move upward if it in general sometime to happen.

In this connection the rules which allows avoiding an error № 1, are the following:

* Never hasten to take the shares which were in favor, and now strongly fallen to those prices, whence they have started to grow.

* At purchase of such actions consider them only as short-term trade.

For those who want to participate in forex trading should start from learning the basics of currency exchange market to make sure you do not have problems with this industry.

There is another option – you can hire professional traders to managed your trading account – read more about forex investment here. Also make sure to search for the knowledge in a good forex book.