Believe me or not, trading is all about learning from your mistakes and do your best not to repeat them. If you could work on your mistakes and keep learning then it will take much much less time to become a professional trader. Pro traders are people just like us, they too make trading mistakes; despite their trading experience or level, mere difference is they put their best efforts to avoid them in future.
Here I will be listing 10 trading mistakes that will make you a loser; like 90% of traders who come to trading to become rich and within 2-3 months blow up their accounts and go back to their 9AM-5PM jobs and curse the market.
Just ask yourself, where do you want to see yourself: in 90% group or 10% who really earn money from trading?
Of course, without any second thought you would like to see yourself in 10% professional traders category.
Do not take this piece of content lightly it will change your life if you will understand the depth of it. Mistakes will also reflect your trading behavior. Observe it, analysis it and work on it. This is all you need to do to get rid of your job and live a Boss Less life.
But if you're repeating, I am saying making, its repeating, following trading mistakes then my friend you are going to become a loser in trading.
Before I unveil trading mistakes that make a trader a loser, I would like to suggest you give your best shot and do not repeat following mistakes just for 6 months and you will see the magic.
It will totally change you. After 6 months, you will not trade to get excited instead you will take trading as a business.
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10 Trading Mistakes That Will Make You a Loser
Revenge Challenge
Revenge challenge trading is something that every trader becomes victim of. A trader enter into a trader in hope of booking profit and end up losing money.
This type of traders know there is a thing like Stop Loss and someone they cut their losses timely but do not accept them heartily as part of trading.
Such traders after booking loss in a trade, instantly, jump into a new trade out of revenge to cover the losses and end up blowing up their trading account.
If you are the one then don't worry, every trader including professional ones, make this type trading mistake. Just keep working on and after booking a loss, give yourself time before jumping into a new trade.
Go out and drink water if you are feeling impatient.
Jack of Trading Strategies, Master of None
90% of traders fail because they spend much of their time in learning new trading strategies instead of mastering a single strategy that meets their temperament.
If you would have heard ever gone to gym then you must have heard that in gym 20% is exercise and 80% is your diet.
Same thing is in trading. In trading, 20% is trading knowledge and 80% is your psychology that make you a profitable traders.
Every trader has different temperament. You need to work on you trading behavior and understand what type of trading; Day Trading or Positional, suits your behavior.
Learn all trading strategies and test them and find a trading strategy that suits your trading behavior.
Read: Max Pain Options: Understand and Start Using Like A Pro Trader
Trades without Stop Loss
Trading without stop loss is the worst trading crime one can make. The day you swear not to trade without Stop Loss Order, you achieve first trading milestone.
You and only you know how you have earned the money that you are using for trading. Therefore, your priority should be safeguarding your portfolio than earning money; just like a king safeguards his castle.
If you could succeed in safeguarding your own money then believe your saved money will automatically attract more money and your portfolio will grow.
Before, you enter into a trade, keep in mind, your money should not go, if it goes then it must go in amount that you would like to let go. Not that market would like to take from you because if market would decide then you would left with nothing.
In my live my live trading videos, I promptly go to positions and place a stop loss order so you too develop this habit.
No Emotional Control
As I discussed earlier, in trading, 80% psychology and only 20% trading knowledge is required to become a successful trader.
As a thumb rule, never trade what you think market will do instead follow your analysis. Only trade when you find a breakout, breakdown or signal.
If you are the one whose trading euphoria sky rocket after 3-4 wining streaks but it turns in desperation after just one loss then you need to work on your trading psychology.
Rad books like Trading in the Zone, to achieve required trading psychology level.
Trading Against the Trend
When I was in the beginning of my trading career, it was easy for me to trade against the trend than placing a trade in the direction of trend (that would have more chances of winning).
I used to think, after finding a breakout, that it is enough, now market would turn back. But instead of turning back, market used to move further 100 points. After 100 points, I would say now it is time, now market would certainly come back. But again market used to move further 40-50 points.
And in the end of the day, after booking losses more than I could afford, I used to see the chart and realize that if I would have traded in the direction of trend then I would have earned good profit.
You know what is worst I did not learn and always traded in the opposite direction. 2-3 times account blown-up but I was very stubborn. I knew trading is good, just I need to understand how to trade.
I started devoting my time to learning new trading strategies and when those too did not make me profitable trader then eventually I read Trading in the Zone book that showed me what actually I need.
I had good knowledge of reading chart patterns and now I got the final key that is trading psychology.
As a rule, always trade in the direction of trend. Yes, there would be some false breakout but most of the time you will capture trend.
Analysis Paralysis
Traders after having good technical analysis knowledge often become victim of analysis paralysis. They know they are correct but still fear to trade and often miss the opportunities.
Trust your strategy after back testing it and it will make you profitable. If after 2-3 consecutive losses, you shift to a new strategy then it is wrong thing.
Quick Rich
Almost all traders come to share market by assuming trading a quick way to become rich. They often take trades in hope with higher risks and quickly blow-up their trading accounts.
Become realistic. Trading is a profitable business, only when you become realistic and take trading as a business. It has potential to replace your job but first you need to give it time, at least 3-5 years.
You should take first 3-5 years as your college degree where you pay fees (here in the form of losses) to acquire knowledge.
It cannot make you rich overnight but certainly can make you poor if you did not pay attention.
Greed and FOMO
Due to greed and fear of missing out, traders take risk out of their limits and end up quitting trading. Remember one who follows risk management and position sizing never fails.
Start using our free risk reward calculator and trade as per your risk appetite.
Envy
Influencers’ inspiring profit screenshots, triggers envy in traders that if they (influencers) can do this why not they. Such traders never understand that influencers too make losses.
They too have gone through what you are right now going through. Don't copy them learn from them.
Every renowned traders on social media, explains how he/she has become a profitable traders. Understand and relate this to your trading journey.
Repeat Trading Mistakes
Trading is all about is hit and trail method. In trading everyone including professional traders make mistakes. We are supposed to learn and not to repeat mistakes again.
Trading is subject to continuous learning because trading changes everyday. Keep learning and improving yourself.
As I know after 3 years a trader start learning real trading. Before that traders make as many mistakes as they can.
If you could avoid above mentioned trading mistakes then I can confidently assure you that no one can stop you from becoming a profitable trader.
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