01/05/2021
Either we win, or we learn.
Here are some of the 10 Most Common Trading Mistakes To Avoid :
1. Not Having A Trading Plan
- Most beginner traders will usually jump from one strategy to another every other week. You'll be a jack of all trades but master of none. You need a proven plan, commitment, and discipline if you intend to become a successful trader.
2.Not Following The Trading Plan
- Loss or not, if you followed your trading plan today, you did the right thing.
3.Impatience
- The Market is a device which transfers money from the impatient to the patient. Everything starts with patience. As a trader, you need to have the ability to sit and do nothing.
4. Overtrading
- Overtrading goes hand in hand with impatience.
If you don't have a setup, do not trade. Don't makeup trades just because you have a trigger finger.
5.Giving Into Emotions
- It would be best if you had an emotion-free mind when trading. If you can't control your emotions, you can't control your money.
6.Risking To Much
- You can never know the outcome of a trade in advance, no matter how good it looks. Every trade is unique. Therefore, only risk a specific amount of your capital on your trading account on each trade.
Risk management is essential in trading.
7.Giving Up
- Don't be afraid of making trading mistakes. Mistakes are proof that you are trying. We all make mistakes, make exceptions to rules, and sometimes take losses we regret. Profitable traders know that the best strategy is knowing themselves, and there are lessons we can learn from the setback.
That's why journaling and reviewing your trading is crucial if you want to become a better trader.
You often find your best learning lessons on how to improve from your losses.
Therefore, journaling every trade and reviewing them is something you should start doing today.
And keep trading.
8. Not Letting Profits Run
- A profitable trading strategy can become unprofitable if you take your profits too early.
You might see a good profit on your trade, but then it starts moving against you, so you close it out early. Don't do that.
If you follow a proven strategy, there's a high probability that it's just a minor pullback before the price continues to move to your take profit target.
The best way to deal with this problem is to enter a stop loss and profit target when you take the trade and then walk away from your computer.
Let the trade work for you.
9. Not Cutting Losses
- Losing trades should only ride to your stop where you close the trade.
Moving your stop when you are in a trade is a devastating and losing habit.
A trade should end in one of four ways:
1. A big win
2. A small win
3. Break even
4. A small loss
You should never experience a big loss.
10.Not Keeping It Simple
- A big mistake many traders make is trading a strategy too complicated for them to trade.
You want to keep it simple.
Most beginner traders usually make trading too complicated.
They are a jack of all trades but master of none.
So how can you keep it simple?
Think quality over quantity.
Master one strategy, stick to one or two time frames (for multiple time frame analysis), and trade one market.
