10 Common and Deadly Trading Mistakes by Traders
The following are the 10 most common fatal mistake of trading, which the investors should avoid at all costs. Each of them can literally destroy their dreams and financial goals!
Trading without a Plan
If you consider yourself a trader, ask yourself these questions: Do I have a set of rules that tells me what to buy, when you buy and how much to buy, not only for the next trade, but for the next 10 trades? Before entering a trade, I know when I'll take profits? I know exactly when I go out if I'm wrong? These questions from the first part of a negotiating strategy. There is just no chance of success if we cannot answer these questions clearly and concisely.
Trader does not know how and when to get out of losing business
It is surprising that most traders do not have a clear evacuation plan to exit a bad trade. Once you wait, pray, wish and rationalize their position. Note that the market does not care what you think. Market does what it does and when you're wrong, you're wrong! The best way to avoid a bad deal to go bad is to determine before boarding, where you can go.
Trading with a big ego
Many people who have remained very successful in other businesses failed in the trading game. Because they have a ego big enough and thought they could not fail. Their egos become the cause of their downfall because they refuse to come out of bad deals. Again, everyone, or when someone comes in the markets, all the charm, persuasion, the number of degrees and diplomas in business management at the wall or business savvy will not budge the market when you're wrong.
Trade and shiver of emotion is not for profit
Many traders see the stock market as a casino and marketing of emotions and just fun. As soon as it is a losing trade, traders want to make a quick recovery of the lost money. Thinking of other things, traders want to get back the lost money, unfortunately, when they resort to and want to restore as quickly as possible this in turn leads to greater errors. Be patient and wait for the next opportunity. Do not rush back in.
Three 4-letter words that will kill you! HOPE - the desire - FEAR – Prayer
If you find one or more of the above while in a trade then you're in trouble! Market has its own system of moving up and down. All waiting, hoping and praying or fear in the world will not turn a losing trade into a gain. When you are wrong just using a simple 4 letter word to correct the situation, GO!
Trading with money you cannot afford to lose
One of the biggest obstacles to a successful negotiation is to use the money you really cannot afford to lose. Examples of this would be money that is supposed to be used in any other business, money to pay for the costs of college / school, etc. trade with money borrowed. Ultimately what happens is that when we know in the back of our minds that this is the money we cannot afford to lose, the action caused out of fear and emotion over logic only deepens the grave. If you're in this situation, it is strongly recommended that you stop trading until you earn enough to put into an account, you can afford to lose without causing major financial problems.
Spending profits before you make them
Nothing is more exciting than the trade that blasts off and puts you in a highly advantageous position. This can cause serious problems, however, because such trade will take a euphoric state and leads to daydreaming about the huge profits still to come. The real problem occurs when you stop dreaming and waiting. This will ensure that you are ready to exit the market and towels to undo all the gains, because you've convinced yourself the final result and deny reality. Easy to solve this problem is to know where and how you can make a profit when it comes to trade.
Do not cut the losses or let your profits run
One of the most common mistakes made by traders is that they let their losses become too great. Nobody likes to take a loss, but not to take a small loss early often forces to take a big loss later. A great trader is not someone who has never had a loss. The major operators have been through many casualties. But what makes them great is their ability to recover quickly from a series of defeats. Each operator must develop a way out of losing trades quickly. Research and learn how to apply the best methods for placing protective stop loss orders. The only way to get a lot of (small) losing trades is to ensure that the winning trades are much larger. After a series of losing trades, it becomes difficult to hold a trade victory, because we fear it will be a loss. Let your profitable trades bloom. Give them room to maneuver and give them time to move.
Do not stick to your plans and strategies for changing market hours
If you are changing your strategy during the day when the markets are still open, know that you probably will be subject to emotional reactions of fear and greed. With rare exceptions, the most sensible thing to do is to plan your negotiation strategy before the market opening and follow it strictly during business hours.
Falling in love with a position (Just Flirt)
Many traders are captivated by any action of one or two and look for opportunities to trade these stocks. Do not ignore other profitable business opportunities. This is because they have simply fallen in love with a stock exchange. These tendencies can be suicidal for negotiation concerned may be all very expensive.