Learn 6 Common Beginner Trading Mistakes
In the today's post, we will discuss very common beginner's mistakes in trading that you should avoid.
1. No trading plan 📝
That is certainly the TOP 1 mistake. I don't know why it happens but 99% of newbies assume that they don't need a trading plan.
It is more than enough for them to watch a couple of educational videos, read some books about trading and Voilà when a good setup appears they can easily recognize and trade it without a plan.
Guys, I guarantee you that you will blow your trading account in maximum 2 months if you keep thinking like that. Trading plan is the essential part of every trading approach, so build one and follow that strictly.
2. Overtrading 💱
That mistake comes from a common newbies' misconception: they think that in order to make money in trading, they should trade a lot. The more they trade, the higher are the potential gains.
The same reasoning appears when they choose a signal service: the more trades a signal provider shares, the better his signals are supposed to be.
However, the truth is that good trades are very rare and your goal as a trader is to recognize and trade only the best setups. While the majority of the trading opportunities are risky and not profitable.
3. Emotional trading 😤
There are 2 ways to make a trading decision: to make it objectively following the rules of your trading plan or to follow the emotions.
The second option is the main pick of the newbies.
The intuition, fear, desire are their main drivers. And such an approach is of course doomed to a failure.
And we will discuss the emotional trading in details in the next 2 sections.
4. Having no patience ⏳
Patience always pays. That is the trader's anthem.
However, in practice, it is extremely hard to keep holding the trade that refuses to reach the target, that comes closer and closer to a stop loss level, that stuck around the entry level.
Once we are in a trade, we want the price to go directly to our goal without any delay. And the more we wait, the harder it is to keep waiting. The impatience makes traders close their trades preliminary, missing good profits.
5. Greed 🤑
Greed is your main and worst enemy in this game.
It will pursue you no matter how experienced you are.
The desire to get maximum from every move, to not miss any pip of profit, will be your permanent obstacle.
Greed will also pursue you after you close the profitable trades. No matter how much you win, how many good winning trades you catch in a row, you always want more. And that sense main lead you to making irrational, bad trading decision.
6. Big Risks 🛑
Why to calculate lot size for the trade?
Why even bother about risk management?
These are the typical thoughts of the newbies.
Newbie traders completely underestimate the risks involved in trading and for that reason they are risking big.
I heard so many times these stories, when a trading deposit of a trader is wiped out with a one single bad trade.
Never ever risk big, especially if you just started.
Start with a very conservative approach and risk a tiny little portion of your trading account per trade.
Of course there are a lot more mistakes to discuss.
However, the ones that I listed above at the most common
and I am kindly recommending you to fix them before you start trading with a substantial amount of money.