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THESE 5 TRADING MISTAKES WILL MAKE YOU LOSE MONEY… 



We often hear about them making profits in trading, but rarely about their losses. This arouses the impression of beginner traders thinking that successful trading involves just a little bit of knowledge. As a result, they soon realize that making money constantly isn’t that easy which makes them feel discouraged due to mistakes that they made. 

 

Dr. Alexander Elder quoted in his book “Come into My Trading Room”, he mentioned “It’s alright to make mistakes. If you aren’t making mistakes, you aren’t learning. BUT it’s unacceptable that you repeat those mistakes. If you are losing money, you’ve probably done something wrong. Eventually, if you learn not to repeat the same errors, you’ll start running out of them” 

 

At this stage, you should know that the trading journey isn’t always going linear. There are hard times and challenges ongoing before getting to their desired goals even the professionals will suffer this stage too. 

 

Well, this may sound classic for some of you but ONE THING that WE CAN GUARANTEE here is that,

To save yourself from losing money, you have to AVOID THESE IRRELEVANT MISTAKES...


1. “NO PLAN, BUY ONLY!” 


“Do your own research!”


Believe it or not, you might have heard this from many financial advisors out there - and it’s the first step you have to do! To succeed in trading, you must do your daily research. Create your watch-list and track the time and diversify your money in different trading stocks in a calculative decision manner that will earn you good returns. 


Although this step is a tiring process, persistence will bring your desired goals. By doing the research, it helps you to create basic fundamental and statistical analysis instead of random emotions or gut. So don’t be ill-prepared and go with the “NO PLAN, BUY ONLY” strategy. 


2. Never understand your enter and exit risk


8 out of 10 traders suffer this mistake - and you should avoid this! This is a very common mistake for most traders yet they often refuse to admit this. As a trader, you can’t run away from this. You have to admit whenever you made a quick exit or stayed for long with a particular trade. 


Also, you have to ask yourself these questions: 


- What is the ratio of risk to reward? 

- How much risk are you willing to take?

- When to enter the trade and set your stop-loss? 


These are the questions that you need to ask yourself before entering the trade. If you never set your stop-loss, then get ready to lose your money.. 


3. Fail to understand trading patterns (Same as number 1)


To succeed in trading, investor must make it clear that RESEARCH is essential before taking a particular decision. Trading will show you different patterns in different types of graphs and charts as they are very volatile. Believe it or not, most brilliant stock investors face challenges to understand the pattern too because it keeps changing. 


Here’s a secret: Don’t throw all of your cash in one basket only just because someone else told you to do it. You should always diversify your money to some other stocks. This will help you visualize a deeper picture inside the mind of the market. You will slowly get to understand the pattern. The more you do, the better your knowledge when it comes to decision-making.


4. Bring feelings to your trading 


“Your brain must control your trades, not emotions!” 


Besides the ups and downs in the market, investors also tend to dwell with their minds, hearts, emotions, and gut. This is what drives them towards psychological trading mistakes. 


Well, greed is a good thing if it motivates you to work hard and learn while fear is good when it prevents you from investing in miscellaneous trades. However, clear decision-making should be done after a bunch of analysis and your emotions are still under control. 


So here’s the tip: learn to do the fundamental macro analysis of the company. Allow yourself to experience the technical and main chart patterns. Study the trend lines on when to buy or sell - observe it thoroughly. Slowly you will be able to build the proper trading plan and make strategic decisions. 


5. No preparation, no plan, yet never discuss with the experienced trader (OH NO!)


Imagine when you are getting ready for an important meeting and you just remember that it’s a must to wear a tie for the meeting. Yet, nobody at home can help you out. The problem isn’t about not owning a tie. The problem is that you don’t know how to wear a tie! 


This is the problem in the world of finance. You can see a bunch of opportunities ahead of you yet not everyone can teach you the ropes to obtain the outcome from the opportunity. Yes, you might be saying you will go on YouTube and watch few videos and learn yourself, which is great and considered one of the resources too. However, this does not apply to everyone who needs step-by-step guidance especially you know nothing about trading (like at all!). Sometimes online resources can provide complicated information and you can’t ask for help right away from that person (unless if you are lucky enough if they see your comments). Hence, look out for more ways to make sure you can cope with the teachings and gain knowledge from there.


Are you new to the world of finance and investing? Not sure where to start? If you are just starting trading or you’ve traded previously yet it’s not going anywhere, it’s time for you to seek help from experienced traders or learn from various sources from the internet. At Eapps, we always advise others about the challenging ongoing and commitment that traders need to have. And if you are ready to transform your income, you have to constantly learn and craft your skill. Slowly it will help you to make more informed decisions. 


Remember, don’t let these 4 fatal mistakes fail your trading. Your financial future is from today’s action. Start your discipline habit now.


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