Not understanding the stock market basics impacts almost all unsuccessful stock traders negatively.
To many mediocre and unsuccessful traders, lack of control over research may sound like a strange point to pick as one which can lead to poor trading results. But every exceptional and successful trader I know would say methodical research is a corner stone of their success.
Let's look at the 2 opposing position. Many traders who do "OK" trade on news, tips, ideas that come across their desk or over the newswire, or some other haphazard method for finding trades. A key characteristic of their trading is that it is reactive.
The exceptional trader doesn't take such risks...he is proactive. Ofcourse, great traders are also reactive. They will allow the news and other events to generte trades for them. This is part of their proactivity. In addition to that, great traders are is purposefully and methodically trawling the markets looking for opportunities. This regular trawling, one of a key set of stock market basics that they have totally mastered, is a key difference that seperates mediocre from stellar traders.
The great traders research is regular, wide and eventually deep. His missed opportunities are few and far between and the quality of his average trades far surpasses the average trades of reactive traders. This is simply because he has a greater catchment area in which to find trades...and therefore probability works on his side because a methodical and repeated process throws up many sterling opportunities regularly.
So, to try to ensure repeated or higher success in the markets, try and do your research methodically. If you aren't researching methodically and are a reactive trader, you are without question leaving money on the table over a long enough time horizon...and this could come back to bite you....hard.
Why risk it? As Nike says....Just Do It! (right from now on)...and master the stock market basics.
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