Hey traders,
That is the absolute fact:
95% of traders will fail.
Working with hundreds of struggling traders from different parts of the world, studying their trades & following their reasoning I found a lot of commonalities. In this post, we will discuss the top 6 mistakes to avoid to succeed in trading.
🤖 Rather than studying the market structure, rather than learning price action, many traders are looking for a "secret indicator". The one that will accurately indicate when to buy or sell the market.
Failing to find the one, they start looking for a set of indicators giving them magic profit formula. At some stage, they stop analyzing the chart at all. They become obsessed with the indicators.
Remember, naked chart analysis always goes first.
The indicator is the tool in your toolbox that is applied as one of the confirmations.
💫 The expectations & mindset play a very important role here as well.
Many people come in trading with a desire to become rich quick. To buy a subscription to some signal service promising them thousands of pips monthly and quite their 9:5 job.
Or to watch a couple of educational videos about trading and after a couple of days of practicing become a whale of Wallstreet making thousands of dollars with a single trade.
Such a mindset is completely wrong. Instead, you must realize that trading is extremely hard. It will take many years and a lot of blown trading accounts before you get how to trade properly.
Moreover, even once you mature, you won't make millions of dollars. Professional trading is simply about winning slightly more than you lose and then living on a margin.
📉 Poor risk management is the primary reason for blown trading accounts. And here I am not talking about some "advanced" risk management techniques.
Many traders simply trade with oversized lots.
Having high leverage & 1000$ deposit at hand the one can simply open a trading position with 1 standard lot and be kicked in by a spread.
Or they open a trading position without a stop loss. Being wrong in their predictions instead of closing a losing position they keep holding it. And while the market keeps going against them they pray the God for a market reversal. At some moment they get the margin call.
You must learn to calculate a lot size for all your trades. Instead of risking a huge portion of your trading account, learn to set a stop loss and risk no more than 1% of your deposit.
📝 Lastly, discipline plays a crucial role in your success in trading. Once you developed a trading strategy & backtested that you must learn to follow its rules no matter what. Usually, once traders catch a losing streak they start changing their rules, they start adjusting their trading strategy. Remember that losses are inevitable. The only correct way to stay afloat is to be consistent and don't break the rules.
Avoiding these common mistakes your chances to succeed in trading will increase dramatically. I wish you be among 5% of traders who made it.
Did you make these mistakes?
