Common Trading Errors Vol. 2
On Tuesday we already explored some trading errors, including:
-Lack of preparation
-Cutting profits early & letting losses run
-Overdoing on news & speeches
-Overestimating or underestimating trends
Now let’s take a look at some more!🤓
5. Being too emotional & lacking patience
Yes, trading psychology again. In particular, when faced with a loss, even advanced traders can get carried away in their desire to make money back. Always think before you trade, even when desperate to fix your situation. Gambling funds is only likely to push you into deeper losses.
6. Setting incorrect timing
If you hesitate too much and wait too long, or on the contrary - act too quick, you may grasp the technically good opportunity, but at an inopportune price. According to Robert Deel - the trading strategist at Tradingschool.com - “smart traders should look for extreme overbought and oversold conditions”, as it helps better manage portfolio risk. Could be worth a shot?
7. Choosing Correlated Trades
Let’s get this straight, if you are sure what you are doing - why not go for it. Yet, markets are unpredictable, and there are plenty of advanced traders who failed to diversify and regretted it. If you see a similar setup in multiple forex pairs, there is a strong possibility they are correlated, giving you a likely win or lose on all your trades. Independence in trades gives more room for error, so to say.
8. Failing to Record Trades
Many traders are skeptical on keeping a trading journal, but it truly goes a long way. Whenever you have a winning or losing trade - record what happened and how you came to make this decision. A daily and weekly analysis of your notes can help stay organized and learn from your mistakes.
Let’s work on our mistakes together & here’s to Happy Trading!🥂