6 Trading Mistakes that Are Killing Your Profits

Trading can be a very profitable venture if you know what you’re doing. However, making just a few mistakes can cost you everything. In this blog post, we will discuss the top 6 trading mistakes that people make, and how to avoid them.

Trading Mistake #1 – Trading 24/7

The first mistake that many traders make is trading all day, every day. They think that they need to be in the market 24/07 in order to make money.

This couldn’t be further from the truth. Trading too much will only lead to burnout and poor decision-making.

It’s important to take breaks and give yourself time to relax.

Trading should be done with a clear and focused mind, not when you’re tired or stressed.

How to Work Around Overtrading.

Trading Mistake #2 – Going All in.

Many novice traders make the mistake of putting all their money into one trade aiming to make it big one time so as to either get rich quick or to recover lost money.

This is a huge mistake.

Not only does it increase your risk, but it also doesn’t give you the opportunity to diversify your portfolio. The worst part, 90% of these huge trades often go south.

How to Work Around Going All In.

Follow rules of money management. For example, you should not invest more than 5% of your account balance on any given trade.

By doing this, you will be able to survive even if your most preferred trade goes against you.

It also allows you to open more trades which in turn gives you more opportunities to make money.

Trading Mistake #3 Opening Random Aimless Trades.

Another mistake that many traders make is opening trades without any plan or strategy.

They simply see a chart pattern and enter a trade without having any idea of where to exit or how to manage the trade. This is a surefire way to lose all your money.

How to Work Around Opening Random Aimless Trades.

Every time you enter a trade, you should have a plan.

You need to know where you’re going to exit the trade and how you’re going to manage it.

A good place to start is by using stop-loss orders and take-profit orders. That’s however not to say that you need not have discipline when trading.

And by discipline, I mean studying the specifics of chart behaviors, understanding the patterns and drivers that affect the price and choosing an effective strategy for the assets you wish to trade.

Trading Mistake #4 Fear of Losing Money Trading.

This is a mistake that is common with novice traders. They are so afraid of losing money trading that they never take any trades.

This often leads to missed opportunities and a lot of regrets. If you’re going to be successful in trading, you need to have some level of risk tolerance.

And even as you put yourself out there and try to become vulnerable with the market; remember not to get too attached emotionally.

Remember, fear is an emotion and emotions always have a way of leading you on to continue trading your way to recovery even when there is no chance of ever getting back your lost money.

How to Work Around Having Fear Trading.

You can start by trading with a demo account.

This will help you get used to the idea of putting your money on the line and also give you a feel for how the market works.

Once you’re comfortable, you can then start trading with a small live account.

Trading Mistake #5 Reluctance to Learning About Trading Before Starting to Earn With Trading.

Often traders complain that the market isn’t working for them yet they are not willing to put in the work to learn how trading works.

They want to start making money as soon as possible without taking into consideration that trading is a business and like any other business, it takes time and effort to be successful.

As a result, they stake too high, disregard professional money, lose money trading and start regretting and cursing thinking they have been cheated.

How to Work Around Reluctance to Learning Trading.

You can start by reading books and articles on trading.

There is a ton of information out there and you need to be willing to put in the time to learn about trading.

You can also join forums and online courses. These will help you speed up the learning process and also give you an opportunity to interact with other traders.

Trading Mistake #6 Fear of Stepping Out of Your Comfort Zone.

Many traders are afraid to try new things and this often leads them to miss out on great opportunities.

They stick to the same strategies, trade the same assets, and never bother to explore other options that might be more profitable.

The worst part is they do all these on the demo account and close their minds off trying the real account to start making real money.

How to Work Around Fear of Stepping Out of Your Comfort Zone.

You need to be willing to experiment with different strategies and assets.

Don’t be afraid to try new things. The only way you’re going to find out what works and end up making real money trading is by trying different things on a real account.

And once you find something that works, stick to it and keep doing it until it stops working. Trading is all about finding an edge and exploiting it.

Conclusion.

These are the top 6 trading mistakes that will cost you all your money. Or, that will block you from making more money trading.

If you can avoid these mistakes, you’ll be well on your way to becoming a successful trader.

Remember, trading is a business and like any other business, it takes time and effort to be successful.

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