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📌📛Avoid these Common Mistakes in Trading Journey🚷🚫
✳️Trading is a difficult process, and it often takes some time to figure out what works for you finding your edge . However, if you can avoid these common trading mistakes when starting your journey in the financial markets, then the learning curve will be much smoother.
It’s important not only that we understand our own biases but also how they play into the way we trade so that we have an opportunity to manage them accordingly. All of this information has been highlighted in order to give traders more insights about common pitfalls so that they may steer clear of them going forward.
Remember trading mistakes are a part of the journey and you won't be able to avoid them all. From those mistakes comes lessons, use them to better yourself and be one step closer to becoming a great trader.
🔰#1 No Proper Trading Plan
Planning is very important for successful trading. If you fail to plan, then you must prepare to face the consequences and losses. Many new traders, with the overwhelmed interest, fail to plan and prepare themselves before they enter into live trading.
Examples:
-(Short-term goal/Mid-term goal/Long-term goal)
-(Time frames and markets)
-(-Strategy-Set-ups)
-(Pre-market routine-Post-market routine)
🔰#2 No Discipline and Emotional trading
Many new traders who are so confident assume that they know well about the market and thus lack to follow the rules or wait to know how the market is performing. They later become frustrated for not being able to tolerate even a small loss and thus withdraw within a few days. It's good to be excited about trading and confidence is always a welcome characteristic, but don’t let emotion dictate your trading behavior and push you into positions you wouldn’t normally take.
Try to temper your emotions. Before launching into a trade, take half a step back and try to look at it objectively. Does it fit with your strategy? Are you doing it based on sound information or just a gut feeling? How would you react if the trade went against you?
Come up with a Discipline and determinated system of cues that will help you protect yourself from too much emotional investment.
🔰#3 No Money Management
Managing your money is very important. Most of the new traders tend to trade without using the protective stop-loss option. However, many are not aware of this option; however, in some situations, this option may also prove to be a wrong option. Perhaps, to sustain Intraday trading, you must be aware of such options that could save you.
🔰#4 Taking too big positions
There is no doubt the attraction of a big winning trade is on every trader’s mind. And the temptation to take a big position (thinking it will be a winning trade) is always present.
But as proven time and time again, taking too big a position on a trade can be risky. There is no guarantee the trade will go the way you want it to go. So, if you risk 50% of your capital in a single trade and that trade turns against you, it will seriously decrease your trading capital.
And it may also take a big psychological toll on you as a trader.
🔰#5 Unrealistic Expectations
for people who joined in financial market to become rich as soon as possible ,Do you expect to become as rich as them overnight? they cannot Walk the hundred-year-old overnight . says making money is easy with intraday trading. Remember, you must be patient, determined, and ready to spend enough time to learn. An increase in experience and profit can be made only consistently day after day,week after week and month after month ,or even maybe over a decade .
🔰#6 Revenge trading
Don’t you hate it when you lose? And don’t you just want to get back into the market, take an other trade and prove you can be a winner?
That’s exactly the thinking behind revenge trading. You want to get even. You want to prove you’re a winner.But most of the time revenge trading can bring more pain than gain.Consider this for a moment. When you get into a revenge trade, you’re most likely not in the best emotional state. You’re most likely still seething or too stressed out to make a sound trading decision. And most likely you haven’t really analysed the next trade – whether it has good potential or not.
So, the best thing you can do about revenge trading is not to get involved with it at all.
If you have a losing trade or a string of losses, it is better to step back and analyse what went wrong.
🔰#7 Leaving Too Early or Staying Longer
This is another mistake new traders do. They either stay for long hours trading and waiting for opportunities or leave early in frustration. Both the situations are not favorable for best Intraday trading experience.
🔰#8 Following the social medias signals and crowd
Following the crowd is a common trading mistake where inexperienced traders blindly follow the herd mentality, finding themselves in detrimental trades.
It's important for novice traders to think about their own trading style when making decisions so that they don't jump into trends without conducting their own research and without understanding why it might work out better for them. If you enter into a trade by following someone else without performing any technical or fundamental analysis and a trade loses, you only have yourself to blame.
🔰#9 Trading in multiple markets at once
Inexperienced traders may jump from market to market - from forex to indices and cryptocurrency to commodities. This is a common mistake and it can lead to over-trading and significant losses.
🔰#10 focusing on the win rate more than risk/reward
Consider two traders(Trader A & B). Assume trader A have a 100 trade per month with a win rate of over 90%, and in each trade a profit of 1% comes out, but for trader B , with a lower win rate of 50%, but the risk to Reward is 1: 3, but The profit of the first trader is 90% in end of month, but the trader B is 150%. So a high win rate does not necessarily mean being more profitable, and the Risk/Reward of a trade can be even more important.
🔰#11 Being able to accept losses
Many traders are under the impression that they can't make mistakes like investment professionals, but this is simply not true.
If you jumped into a trade without doing your due diligence or you're a long-time earner and your portfolio has suddenly taken a dive, it's important to accept what happened and move on instead of letting your pride control your trading style, and hold onto those losers longer.
There is always going to be another day and another trading opportunity. Learn from those previous losses to continue improving your skillset on the way to becoming a successful trader.
🔰#12 Not tracking trades in a trading journal
Using a trading journal is a very critical part of becoming a successful trader. It isn't as simple as recording your entry and exits for profitable trades, it requires a bit more information and attention.
Your trading journal should include all trades, good, bad and even the really bad ones.
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