Bad Habits of Traders

By | July 23, 2014
  • They  trade too much. A major edge small traders have over institutions is that we can pick our trades carefully and only trade the best trends and entries. The less I trade the more money I make because being picky is an edge, over trading is a sure path to losses.


  • Unprofitable traders tend to be trend fighters always wanting to try to call tops and bottoms, while they eventually will be right there account will likely be too small by then to really profit from the actual reversal. The money is made swimming with the flow of the river not paddling up stream the whole time.


  •  Taking small profits quickly and letting losing trades run in the hopes of a bounce back is a sure path to failure. The whole thing that makes traders profitable is their risk/reward ratio, big wins and small losses. Being quick to take profits but allowing losses to grow is a sure way to eventually blow up your trading account.


  • Wanting to be right more than wanting to make money will be VERY expensive because  the trader won’t  want to take losses and he definitely will not want to reverse his position and get on the right side of the market because in his mind that is a failure, in a profitable trader’s mind that is a success if they start making money.


  • Unprofitable traders trade too big and risk too much to make too little. The biggest key to profitability is to not to have BIG LOSSES. Your wins can be as big as you like but the downside has to be limited.


  • Unprofitable traders watch CNBC for trading ideas. Just stop it.


  • Unprofitable traders want stock picks while profitable traders want to develop trading plans and systems.


  • Unprofitable traders think trading is about being right. Profitable traders know it is about admitting you are wrong quickly but when you are right staying right for as long as possible.


  • Unprofitable traders don’t do their homework because they think there is some easy route to trading success.


  • Unprofitable traders #1 question is how much can they make if they are right, the profitable traders #1 concern is how much they can lose if wrong.