Common Trade Mistakes
- Lack of Trading Plan - Some traders do not know what to do if they are wrong nor what to do if they are right. The large floating profit they make may often turn into a large loss, because they did not know when to get out. Trade defensively and always know your downside and what your at risk of losing
- Lack of Money Management - Good money management means you know your profit objective and the odds of being right or wrong.
- Accept a Losing Trade - Many traders/investors lose confidence aft er a couple of losing trades and reduce their ability to become an efficient trader. You must realize at times you will be wrong and you must be able to cut your losses and move on.
- Hope - This is the most devastating of all the emotions in trading or investing because it can lull you into becoming complacent. When your in a position of hope it means market is controlling your money and you were wrong. Never Hope: Just manage doubt.
- Taking quick profits and letting losses run - is a result of no trading plan or objective for entering the market. It's better to bask in elation of winner than sit and hope on a loser. Cut losses and go again.
- Make 1st entry on best trade signal
- 2nd Entry is 50% amount of initial entry once cleared next resistance trend line
- Adjust stop to first entry in order to elimate that risk while still holding
- 3rd Entry is 30% of 1st entry which creates the pyramid
- Adjust stop on 1st and 2nd entry to 2nd entry and pick a target