Mistake 1 - Buy Long Only

Prices go up. Prices go down. Prices go sideways. Investing strategies that work only when prices go up will be losers.

• You'll win only about a third of the time.

• You need investing strategies for down markets and sideways markets too. Here are some you can easily learn to do:

In a down market -

• Sell short.

• Buy inverse ETFs.

• Buy put options and other option strategies for down markets.

• Buy "hedges" - what goes up when the rest goes down.

In a sideways market -

• Use non-directional option strategies.

All this may sound scary, but it's easy. All you need is a little coaching.

Mistake 2 - Fight the Trend

Stock prices can trend up or down. They can drift sideways. When there is a trend, go with it.

• Buy long in an up trend. Sell short in a down trend. Prices go up and down even when there's a trend. Prices always wiggle.

• An up trend means up moves are bigger than down moves.

• A down trend means down moves are bigger than up moves.

Many would-be scalpers fight the trend.

• They try to sell before the brief downs in an up trend.

• They try to buy before the brief ups in a down trend.

Don't do it! Here's why -

• Price moves against the trend are smaller than price moves with the trend.

• Down moves in an up trend are smaller. Up moves in a down trend are smaller.

• Fighting the trend means chasing smaller profits.

• Few people can time the brief moves inside a trend. Don't try.

Smart investing strategies follow the old saying "the trend is your friend."

Mistake 3 - Buy Without Knowing Why

Most people buy without knowing why. They get a hot tip from a pal. They see a TV report. They read a newspaper. But investing strategies take research.

• What will move the price?

• When will this happen? How long will it last?

• How big will the price move be?

• What could throw off your plan?

• What is your chance of success?

You raise your risk if you don't even think about these questions.

• Don't ask questions after you buy. Ask before.

• Take your time. A decision made in mere minutes is risky.

• Get good advice. You'd research a new TV or computer buy. Do as much for your investing strategies.

Mistake 4 - Give Back Your Profits

What should you do after you go into the black? Never let a paper profit turn into a loss.

• Protect your trading capital - the number one goal of investing strategies.

• Strategies that reduce risk are the long-term winners.

Trailing stops are the best way to exit with a profit.

• Place a trailing stop order right after you buy.

• Your broker sells if the price falls to a price you name.

• Your biggest possible loss should be no more than 3% of your total trading capital.

Trailing stops move up as the price rises.

• For example, if you buy at $50, with a 10% trailing stop you'd sell at $45 ($50 - 10%).

• If the price rises from $50 to $60, you'd now sell at $54 ($60 - 10%).

• Trailing stops never fall, even if the price falls.

• Once your stop rose to $54, it would not go lower. No matter what happens to the stock price.

• You'd keep at least $4 of your profit after the stock rose to $60.

Trailing stops get you out before all your profit vanishes. That keeps a profit from turning into a loss.