Just as with raising children or as with nurturing one's career, "success" within personal investing allows plenty of room for subjectivity. After exploring the common opinions of prominent economic actors, established entrepreneurs, and financial advisors, I have come to define a successful investor as someone who, with a moderate amount of time, devises an investment strategy to achieve financial objectives and personal objectives and who gains access to competitive returns by undertaking a certain degree of financial risk.
Upon a careful investigation of recent market trends, investing research, and stock market perception, it becomes apparent that stock-market-specific decision making builds on both objective variables (unbiased reports, facts, financial figures, diagrams), and subjective factors (investors' reactions to quantifiable market indicators, such as apprehension, haste, stubbornness, fear, greed, impatience, etc.).
Among the ranks of inexperienced stock-market investors, this overlap renders market actors prone to a number of investing mistakes, some bigger than others. In other words quality decision making in stock trading is not limited to staying up to date with the facts. Decision making is more about learning how to perceive and interpret the information you get in order to come up with conscious, well thought out action plans.
Even the most knowledgeable and intelligent stock-market players can succumb to simple mistakes if they base their decisions on pure instinct instead of reasoning. In fact a large majority of mistakes are the consequence of subjective thinking - in other words of letting feelings take control when making decisions. Because of that, before we begin enumerating and discussing the most common mistakes and traps of stock market investing, we will first discuss the behavioral aspects of investing and probe into several important aspects of cognitive psychology.