11 Costly Stock Trading Mistakes New Investors Make

2. Ignoring Risk Tolerance

Trading beyond your comfort zone almost always backfires. New investors often take big risks thinking bigger bets mean bigger returns—but when volatility hits, panic sets in. If a 10% drop makes you want to sell everything, you’re overexposed. Know your personal risk tolerance before you trade. That means understanding how much loss you can stomach emotionally and financially. Risk isn’t just about what’s on a chart—it’s about how you respond when things go south. Build positions slowly, diversify early, and don’t invest money you can’t afford to lose.