Holding on to losing trades and getting rid of winning trades. Here we go again: the old but I dont like to lose argument. Its human nature to hold onto losses in the hopes that they will rebound. You will have losing trades; get used to that fact. Focusing on how you manage loss rather than trying to ignore it will put you ahead of the crowd.
On the flip side, traders often get out of winning trades too early so they dont have to deal with giving profits back.â€ If you want to lose money trading, holding losses and getting rid of winning trades is a surefire way to achieve it. In trading, its much more important to be profitable than to be right, and in order to be profitable, you need to cut your losses early and let your winning trades keep working for you.
Overtrading. This one is simple. If you are trading simply for the sake of trading, you are overtrading. Trade because you see opportunities in the market based on your system. Trading is not like a 9-to-5 job where you are rewarded for constant productivity. You dont get paid to push buttons all day long; you get paid by making good, winning trades. Its that simple. Movement in the markets doesnt mean you must trade. Trade when things line up for you. Be patient, wait for setups to occur, and when they do, take action. If you want to succeed at trading, you need to act like a winning trader, and winning traders are patient and wait for setups.
Not taking trading seriously. During my trading seminar I am often puzzled by how often people approach trading with a different attitude than they do any other business. Trading is a business, and like most vocations, it takes time to learn how to perform well. People go to school for years to become doctors; but many so-called hobbyist traders think that simply reading a few For trading books or scanning some indicators will suffice. This attitude toward trading is like throwing darts at the wall with a blindfold on. Trading is not easy, and you cant learn it without effort.
Not having a successful mentor. Any successful trader once had a mentor, coach or service help him to formulate a plan and strategy and learn how to be successful. I am no exception to this rule.
Yes, there is a lot of free advice available, especially on the social media. You can spend your time sorting through it, guess which nuggets of information are authentic and valuable, and then hope for the best. But will you learn to do it well? And how long will that take, exactly? And do you really have that kind of time and discipline?
Working with a mentor is a powerful shortcut that helps you tap into proven trading approaches so you can start learning faster. When you enlist a mentor, you are essentially buying knowledge and training that is an investment in your future trading. Over time, as you learn a framework that works, you will eventually be able to add your own investing twist to it. But like a house, a solid foundation is the very first step.