As a trader we need to do constant improvement, as trading is an evolving filed and we need to adjust ourself based on changing market conditions. To be best we just need to avoid doing mistakes, the more we minimize our mistake better we will become. Below we have listed few mistakes which if avoided can take you to the path of successful and profitable trading
- Over Trading : Traders trade too much based on emotion not on a trading plan. Probability of making money increases when you trade less not more.
- Trend Fighters : Traders tend to be trend fighters always wanting to try to call tops and bottoms, Tops or Bottom will be formed 1 day but till than they would have lost most of their account capital. Do not be a Hero try to be grounded and go with trend till you develop require skills and capital to fight against the trend.
- Over Leverage: Traders trade too big and risk too much to make too little. This happens mostly with trades who have less capital but want to get rich quickly. Your main gal should not be to make money but to preserve your capital.
- Living in world of HOPE: 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.
- Emotional Attachment: Most traders might find it difficult to emotionally detach from executions.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.
- Not Developing a Trading Plan :Most of traders do not focus on learning but focus on earning. There is no EARN without LEARN