One of my students recently asked me what I thought would be an interesting topic for today’s blog:
“I was regularly making a good profit, but by overtrading, I gave back all profits to the market.” This occurs every time I make a string of profitable trades.”
Many of the students with whom I work have the sensation that they are destroying themselves by making the same mistakes day after day, handing back precious profits in a fraction of the time it took to obtain them. They are aware that they are not mentally sick or have a history of out-of-control conduct, so they are perplexed as to why they can’t seem to stop shooting themselves in the foot.
When I examined myself and a number of pupils, I discovered that the fundamental reason for a trader’s repeated mistakes is GREED. They believe trading is a way to make money quickly and easily. This is the most common reason for a trader to lose all of his hard-earned money.
Repeating the same mistakes will not make you a better trader; instead, it will cause you to lose more money. Stopping mistakes and trading profitably should be a part of your plan. So here are some suggestions I give my students to avoid making the same mistakes:
Make a Trading Journal:
Do you keep making the same mistakes but don’t understand why or how? Then you most likely do not keep a trading journal. You’ll need a trade notebook if you want to stay in this game for a long time and celebrate your victories. Keeping track of all trades can eventually reveal the hidden pattern that causes you to make the same mistakes over and over again. The notebook should include recordings of your feelings, trades, and ideas, which should be reviewed on a regular basis.
Don’t Over Trade:
Why do you keep making the same mistake? Do you trade excessively? (If you haven’t already, read my blog about OVER TRADING.) If you answered yes, please understand that you are not obligated to participate in every trade due to the fear of missing out (FOMO) emotion. FOMO pushes you to participate in a variety of deals, including disastrous ones. Professionals and seasoned traders would gladly warn you not to overtrade. Remember that possibilities will always exist, and FOMO should not dictate your thoughts or disrupt your plans.
Stick to a Trading Plan:
Traders who do not have or follow a trading plan are prone to making the same blunders. Make sure you’re not the person who keeps making the same error by not having a plan or sticking to it. Entering the market, safeguarding your position, and leaving the trade all require a solid strategy. Having a strong trading strategy is one thing, but sticking to your strategy is another. Have a thorough plan in place for making informed entrance and exit decisions in the live market.
Treat Trading as a Business not Gambling:
One of the most common blunders made by traders is failing to handle their trading as a company. Instead, they consider it a game of chance. If you want to thrive as a trader, you must approach it like a serious business, because it is. In trading, it is critical that you plan your trading strategy ahead of time. This entails conducting research, creating your approach, and back testing it.
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