Winning System: 21 Costly Common Mistakes Most Investors Make

In the "How to Make Money in Stocks" book, William J.O'Neil also spare one chapter and point out the importance of learning from our mistakes. 

"Build up your weaknesses until they become your strong points"

The reason people either lose money or achieve mediocre results in the stock market is they simply make too many mistakes. Below are the key mistakes investors need to avoid to get better investment results. 

1) Stubbornly holding onto your losses when they are very small and reasonable. 

2) Buying on the way down in price, thus ensuring miserable result. 

3) Averaging down in price rather than averaging up when buying. 

4) Not learning to use charts and being afraid to buy stocks that are going into new high ground off sound bases. 

5) Never getting out of the starting gate properly because of poor selection criteria and not knowing exactly what to look for in a successful company. Overly concentrate in highly speculative or lower quality securities

6) Not having specific general market rules to tell when a correction in the market is beginning or when a market decline is most likely over and a new uptrend is confirmed. 

7) Not following your buy and sell rules, causing you to make a increased number of mistakes. 

8) Concentrating your effort on what to buy and once the buy decision is made, not understanding when or under what conditions the stock must be sold. 

9) Failing to understand the importance of buying high quality companies with good institutional sponsorship and the importance of learning how to use charts to significantly improve selection and timing. 

10) Buying more shares of low priced stocks rather than fewer shares of higher priced stocks. 

11) Buying on tips, rumors, split announcements and other news events.

12) Selecting second rate stocks because of dividends or low price/earnings ratio. 

13) Wanting to make a quick and easy buck. 

14) Buying old names you're familiar with

15) Not being able to recognize and follow good information and advice. 

16) Cashing in small, easy-to-take profits while holding the losers. 

17) Worrying way too much about taxes and commissions. 

18) Speculating too heavily in options or futures because you see them as a way to get rich quick. 

19) Rarely transacting "at the market", preferring instead to put price limits on buy and sell orders. 

20) Not being able to make up your mind when a decision needs to be made. 

21) Not looking at stocks objectively. 

It takes time and a little effort to get it right, but in the end, it's worth every minute you spend on it. 

You can learn to invest with knowledge and confidence to protect your money and at the same time find and properly handle highly successful companies. 

*Abstracted from the book, "How to make money in stocks" by William J.O'Neil.