Trading is a process that is different for each participant: a great deal of success depends on our personal qualities and strength. And again, a lot of things are common - the similar obstacles we all go through and the common pitfalls that traders lurk at any given time.
In this article, we have gathered the potential killers of trading success, as well as recommendations on how to eliminate them or reverse the situation where things are not working out for us.
1. To be lazy to test things
It is very tempting to just start trading a new strategy to pick the monetary fruits from it. However, embarking on the unknown is not the best idea. Practice makes perfect and it is always better to test things.
As a result, we use the potential achieved by demo accounts - we test the services provided by our broker, test the new strategy, work on risk management and position volume.
2. Extreme emphasis on result
Many traders expect to see staggering amounts of profit literally in no time. Others are fixated on the idea that every transaction should be profitable.
We will not argue that trading should be in our favor, there is no need to comment. However, the profit craze by itself will not help you. In the end, the rewards will not be achieved alone.
All the important things - analysis, strategy, risk management - are the elements of the trading process. So, while it is absolutely necessary to have a goal (reasonably, surely), once the goal has been set, you must devote all your strength and attention to the trading process.
Learn from every deal you make - your own experience of monitoring and working with the market is your most valuable asset. Focus on the key elements of the trade mentioned above and try to improve your skills in each one.
3. Lack of good cash and risk management
The reasons for this mistake may be different: the laziness we have already discussed, ignorance, lack of patience. Keep in mind that professional trading is not a game and that every time you are actually betting on real money, not just any numbers you see on the screens.
In addition, remember and be wary of the following: human nature has always been and will always be inclined to underestimate the possibility of a bad scenario. Accept the idea that there will be losses and your job is to make sure that they will not eat out of your deposit. Be prepared: don't risk too much and use stop los orders.
4. Forgetting big timelines
Some intraday traders - beginners - think of daily and larger charts as something distant and unrelated to what they do. Still, they show the big picture.
Although the fractals we see in the small graphs are the first to indicate a change in markets, they may just be noise that won't turn into a new trend.
As a result, be sure to consult the big charts every day to make sure that your short-term ideas do not clash with the long-term truth of the high-end supports and resistances.
5. The constant haste
Ask yourself the following question: Are you a patient person? Do you want to open a trade order, no matter buying or selling, as soon as you have turned on your trading software just to do something?
Such a hurry to start trading is quite common these days, with the process itself being sophisticated, quick and easy. Another form of illness is when a person notices the rapid movement of the price and has a sudden panic attack, obsessed with the fear of missing out (FOMO) the deal of his life.
The problem is that if you are in a hurry, you will probably save yourself a lot of market analysis and get into something that you should not go into. Chances are that you will miss out on risk management as well.
To avoid such situations, try to consciously monitor your psychological state during each trade. Make it a routine check: every time you feel you are moving too fast, hit your brakes, take in a deep breath and think more.
6. You do not understand the essence and logic of the market
Quite often traders look at the chart but do not actually see it. Remember that price action is the result of the activity of all market participants or that a correction is obtained after every major move. It is also worth noting that the lower peak of the uptrend is an alarming sign for bulls or that breaks at important levels may be false.
In addition, candles and their models can tell you stories about what happened to the price; that technical indicators do not bring new information but are derived from price; that major economic disparities shape long-term trends and the market is driven by expectations more than events themselves, etc.
To become better at reading the market, make your predictions about the instruments you are not trading and see how things turn out. Watch the price response of economic news. Put into practice every piece of knowledge you get.
7. Excessive analysis
Unfortunately, sometimes too much of something good does something wrong. You should always be able to see the chart and prices below all the lines you've drawn and all the metrics you've applied - no jokes!
To be honest, it's hard to understand how you might need more than 3-4 indicators: it doesn't make sense to apply indicators that have similar functions. In addition, more indicators will simply make the trading strategy bulky and dysfunctional.
As a result, cut out unnecessary things and use the rest effectively.
8. Poor planning and organization
In some endeavors, it pays to be spontaneous. However, trade is rarely one of them. This does not mean that commerce is not creative, but it requires disciplined execution at many different levels.
Here, we emphasize not only the need for a trading plan with the technical details of your transactions, but also the need for daily operation. Make sure you organize your activity carefully. Set specific trading periods and remember to stick to them.
Our most sincere advice to you is to try and actually use the proposal solutions. As can often happen in trading, the things listed above may seem banal and easy.
However, many traders do not try to change their situation and forget about the easy steps that can make their trading life much better. Has the time to become a responsible trader come?
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