Editor’s Note: This special report was once only available to subscribers of the Rhino Stock Report. Now, in honor of our launch, it’s free to everyone here on the Rhino Stock Blog…

There’s a common misconception among investors today – they think that Wall Street wants them to make money. The truth is that there are a slew of mistakes the brokers, bankers, and analysts want you to make.

But never fear… you don’t have to fall into the financial trap.

No matter what kind of investor you are, if you steer clear of these seven mistakes, your chances of making money in today’s wild markets increase exponentially.

7. Trade, and Trade Frequently
There are more than a few reasons why super-investors like Warren Buffett believe that “buy and hold” is the way to go, one of them is the fact that switching up your holdings too often can take a huge bite out of your portfolio’s performance.

But don’t ask your broker about that. Trading commissions are one of their biggest moneymakers. That’s especially true at online discount brokers like Scottrade and ShareBuilder, where commissions make up the bulk of their revenues.

This rule applies even if you’re a trader; the point here is that your trades should be calculated and well thought out. So, if you are a trader, your trades should be based on technical charting know-how, not a hunch.

6. Buy Small Quantities of Stock
Buying tiny quantities of stock is a trap that all too many newer investors fall into. While having small positions in any given company might seem like a great way to avoid too much risk, when you buy small quantities of stock, the only risk you’re eliminating is the risk of making any money on your investment.

You see, just like trading frequently, buying small quantities of stock means that you’re paying more commissions per investment dollar – something brokers love.  When you buy $50 worth of stock with a $10 commission, it takes a much higher return on investment to cover that commission than it would with a $500 or $5,000 position.

When decide to make a trade, you should factor in the commission you’re paying to figure out your break-even point. Use let’s use the example of our $50 position from before…

$20 commission ($10 to buy and $10 to sell) ÷ $50 investment = 40% returns needed to break even.

Now, let’s look at a $500 investment:

$20 commission ($10 to buy and $10 to sell) ÷ $500 investment = 4% returns needed to break even.

Needless to say, keeping the size of your position in mind can make a big impact on your gain making potential.

5. Take Your Broker’s Word For It
If a restaurant has meat that’s about to go bad, they’ll call it a special and try to unload it before it turns and they have to throw it out. You might not know it, but Wall Street’s the same way.

If you have a full service broker, take their advice with a grain of salt.

Why, you ask? Well, as tempting as it may be to take your broker’s advice, they might be cashing in on your trust. There have been countless lawsuits and investigations over brokers who sold their clients on the newest stock their firm’s investment banking arm was taking public, or on shares of a company that the firm wanted to unload.

That doesn’t mean that you can’t trust any financial professionals out there… if you have an independent financial planner or advisor, there’s no reason not to listen to their advice.

Remember though, if your broker gives you a “hot tip” on a stock that you’re thinking about buying, the only way to make sure that you’re making the right move is to do your homework and take a look at the company’s potential for yourself.

4. Open a Margin Account Right Away
Using margin, or borrowed money from your broker, is a great way to get extra buying power when you find a hot stock, or want to short a doomed one. And brokers will be glad to get you set up if you’re looking to get a margin account.

But that doesn’t mean you should…

While margin can give you the leverage you need to rake in some serious profit potential, it’s not for everyone – especially novice investors. Margin is a lucrative product for brokers, so it stands to reason that they’re happy to get your account going.

Stocks can fluctuate wildly, and it’s easy to get over your head if you’re using margin. Even though margin looks appealing, if you’re new to the investing game, it’s best to wait it out.

3. Get Emotionally Involved with Your Investments
You’ve picked a winner – or so you thought… Your stock is taking a dive this quarter. You’d sell, but you really like the stock and you just know it’ll make a turnaround.

Does this scenario sound familiar to you? Getting emotionally involved with your investments is a tough mistake to avoid. Even the pros sometimes hold on to their “winners” as they plummet through the floor. But you’re not going to…

Investing is a zero sum game. That means that for everyone who picks a winning stock, someone’s buying a loser. We’ve all heard the mantra “Buy low and sell high,” but when you sell high, your buyer’s taking on a stock that’s not so hot anymore. When you get emotionally involved in your investments, your likelihood of buying high and holding on until it bottoms out is increased.

So then, how do you avoid getting emotionally involved? The best way is to do what the pros do – set target sell prices for your investments when you buy, and stick to your targets.

2. Buy More Brokerage Than You Need
When it comes down to it, brokers are salespeople. They sell you on their stocks, they sell you on their funds, and they sell you on their brokerage services. Don’t let them.

Buying more brokerage than you need is a mistake that’s easy to fix. Take a look at what you get from your broker, then take a look at what you use. If you’re paying for extras you don’t use – like phone advice or a “bells-and-whistles” trading platform – cut the extra fees and cancel them (or switch brokers).

Investing is all about the business world, and you should think of your portfolio like a business. All of those brokerage fees and commissions are expenses that take away from your investment income. Be a good CEO and trim the unnecessary.

1. Keep Tons of Cash with Your Broker
Brokerage accounts are for securities, not cash. And while it’s all right to have some cash on hand to trade with, it’s definitely not advisable to let cash sit idly in your account.

Even if your broker pays you interest on cash in your account, don’t be fooled… that amount is paltry compared to what you could earn by sticking your cash in a high yield savings account, money market, or CD.

And don’t think that cash in your brokerage account is any more convenient than one of the alternatives. Most brokers make it a pain to get cash out – and for good reason – it’s a big money maker for them. Like banks, they use your cash to lend to other customers. But unlike banks, the margin loans the brokers are handing out have APRs closer to a credit card than a mortgage.

Do yourself a favor and put your cash somewhere where it can grow even if you’re not investing in the market.

Make Money, Not Mistakes
The investing world is tough enough without Wall Street angling for a cut of your portfolio’s profits too. Now that you know seven ways Wall Street wants you to trip up, you’re on track to make money, not mistakes.

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