5 common mistakes to avoid when trading on mobile apps

Mobile trading apps have transformed investing, making it easier than ever to monitor markets, place trades, and manage portfolios with just a few taps on a smartphone. However, if you have ever placed a trade on your phone and regretted it moments later, or questioned why carefully selected investments are underperforming, you are not alone.

While these apps are highly convenient, they also come with risks. Even small errors, whether from overconfidence or a lack of preparation, could mean missed opportunities or unexpected losses. On that note, let’s explore the five most common mistakes traders make on mobile apps and, more importantly, how to avoid them.

1. Neglecting market research

A trading app keeps you informed with real-time notifications about market news, fluctuations in prices, and expert tips. While staying updated matters, relying solely on these external cues without doing your own thorough research may lead to ill-informed decisions. 

Rather than acting on surface-level data or sensationalised headlines, make sure to do a deeper analysis of every fund you are planning to invest in. It is wise to align your trades with clear investment goals and a defined strategy. Whether short-term or long-term, every trade should serve a purpose. 

2. Ignoring risk management

Not having a risk management strategy is one of the major mistakes traders make. Not setting stop-loss orders, investing more than you can afford to lose, or putting all your capital in a single stock are common examples of poor risk management. Here are some tips to avoid it: 

• Don’t put all your money into one stock or asset. Spread your investments across different options like stocks of different companies, mutual funds, etc.

• Use stop-loss orders to automatically sell when a stock reaches a certain price. This protects you from significant losses.

• Try not to trade more money than you can afford to lose. Always have a portion of your capital reserved for emergencies.

3. Poor timing of trades

Trading apps offer timely alerts and data, but reacting impulsively to this information without thorough analysis can lead to poorly timed trades. For example, buying stocks just before earnings announcements without understanding market sentiment can lead to losses if the results don’t meet expectations. Similarly, selling during a temporary market decline triggered by short-term news could mean missing opportunities when the stock price recovers.

Note that successful traders analyse historical price data, volume trends, and major market events before entering or exiting trades. After all, strategic timing isn’t about luck, it’s more about preparation and knowledge.

4. Monitor but don’t over-indulge

Many traders tend to check their demat account online every second and focus excessively on every market movement. Markets naturally fluctuate due to minor supply-demand shifts, algorithmic trades, or low-volume trades. However, constant monitoring and micro-managing could lead to overreacting to minor fluctuations that often have little long-term impact. 

It might be wiser to avoid fixating on live charts and instead rely on price alerts for key levels and daily summaries to get a clearer perspective on market trends.

5. Trusting poor network and hardware

Weak internet signals, especially in remote areas, can cause delays in price updates or incomplete trade executions. For example, cached data may display outdated prices, which may lead to uninformed decisions. A device that lags or crashes mid-trade can further complicate matters, especially during volatile market conditions. 

Always ensure a stable internet connection, keep your device updated, and have backup options like a laptop or secondary mobile ready for emergencies.

Key takeaways

Mobile trading apps are powerful tools that offer instant access to the financial markets and high convenience. However, to make the most of these platforms, you must avoid common trading mistakes that can impact your profits and long-term growth. Avoid missteps such as lack of research, ignoring risk management, poor timing, over-monitoring, and neglecting device and network compatibility. By avoiding these errors, you can optimise your trading strategy and enhance your investment growth.