Become a Great Trader by Avoiding These 5 Mistakes

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Would you like to become a successful trader? It's important to avoid many of the

common mistakes traders often commit.

Despite our differences, we are all human.Most of us are driven by our emotions, particularly fear and greed. As you learn to trade, you are bound to make mistakes, but the traders who ultimately succeed are those who LEARN from their mistakes and figure out how to stop repeating them in the future.

“Most of us are driven by our emotions, particularly fear and greed. As you learn to trade, you are bound to make mistakes, but the traders who ultimately succeed are those who LEARN from their mistakes.”

To succeed, you need the right strategies. It is essential that you know all the rules

before you can hope to succeed. In order to be effective, you must both learn how to do it and avoid common pitfalls. The purpose of this article is to explain that. I'm sharing 5 mistakes traders must avoid at all costs. You should know them and avoid them!

Now let's get started…

#1 Placing a Trade Without Planning

It is common for new traders to enter a trade and hope the stock price will increase

as soon as they do. Any trader who has done so knows this does not usually happen.

However, this does not prevent beginners from trying. When the trade starts

moving against them, they'll let their emotions take over as they find reasons to

believe the stock price will go up. A lack of a trading plan often results in these mistakes.

Before entering a trade, you need to be able to answer the following questions:

● What am I seeing on the chart that makes me go long or short?

● What is my price target?

● What percentage of my money am I willing to risk?

● By what point does this trade start moving against me and no longer

benefit me?

You can then set entry and exit points for your plan if you are able to answer those

questions. Trade only if you can answer those questions!

#2 Ignoring Indicators

Indicators are telling you something about the stock, and you can't ignore what

they say. Breakouts in the buy direction and breakdowns in the sell direction. As

soon as the indicators tell you a trend is near its peak, you should take profits. It's

time to get out of the trade.

If the indicators indicate that a stock is not ready to trade, stay away. In conclusion: Keep your trading plan on track.

#3 No Trading Journal

As a trader, journaling is not usually what comes to mind. When you enter a trade

and exit with a profit, you note it, and then another trade is entered.

It's important to record everything you do - the good, the bad, and the ugly. Whenever you enter a new trade, it is a good idea to take a screenshot of the chart

and the setup. Write down what made you like the chart and why you entered the

trade.

You should write down exactly when you exited your trade. Examine your entries,

exits, and timing. Learn from your successes and failures. Trading is one of the best

ways to improve as a trader.

#4 Letting Emotions Take Control of You

A constant battle takes place between bulls and bears on the financial markets.

Price goes up when there are more bulls than bears in the stock. In your mind, your

heart, and your gut, the same battle takes place when the bears are stronger than

the bulls. It's a constant struggle between fear and greed.

This is what leads to psychological trading mistakes: You let your emotions

overrule your rational thinking. Make sure you're in control. Knowing when to feel greedy or afraid is what lets you know how to make good decisions.

#5 Ignoring Stop Orders

In order to prevent excessive trading losses and to potentially lock in some profits

when you hit a winner, make sure that you set stops for every single trade that you

make. You might be busy with other things, so setting stop orders is important.

Whenever a stock loses support and everyone wants to get out in a hurry, it will fall

much faster than you will be able to place your sell order. Your profits could be

wiped out if that happens. As soon as your order is filled, place your stop-loss

order. Similarly, you must predetermine this risk before you even enter the trade.

In Summary

The trading industry is difficult, and that is a good thing. If it were easy, it wouldn't

be fun - or potentially very lucrative.

Research, practice, and learn. Control your emotions. A certain amount of greed is

good, otherwise, you wouldn't want to trade stocks. Fear is good, or you would lose

everything.

Don't let your emotions override your trading knowledge. Certainly, that's an easy statement to make, but as soon as the markets are open, it's hard to act. But once you practice and master it, you'll be glad you did.

Consider your mistakes now that you've learned them, and see how many of them

you make. There is a lot on the line here, so be honest with yourself. Keep a trading journal.

Write them down! (And don't just store them in your head!)

Do you make any of these trading mistakes? Is there anything you're most guilty

of? Please share your thoughts. Your story could help other traders - and that is,

in my opinion, what it's all about. Feel free to share your thoughts below!