The following typical trading errors have a specific cause rooted in a thinking methodology that can be changed.
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Refusing to define a loss.
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Not liquidating a losing trade, even after you have acknowledged the trade’s potential is greatly diminished.
- Getting locked into a specific opinion or belief about market direction. From a psychological perspective this is equivalent to trying to control the market with your expectation of what it will do: “I’m right, the market is wrong.”
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Focusing on price and the monetary value of a trade, instead of the potential for the market to move based on its behavior and structure.
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Revenge-trading as if you were trying get back at the market for what it took away from you.
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Not reversing your position even when you clearly sense a change in market direction.
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Not following the rules of the trading system.
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Planning for a move or feeling one building, but then finding yourself immobilized to hit the bid or offer, and therefore denying yourself the opportunity to profit.
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Not acting on your instincts or intuition.
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Establishing a consistent pattern of trading success over a period of time, and then giving your winnings back to the market in one or two trades and starting the cycle over again.
Credit: Mark Douglas.
Have a great week ahead!
Rgds
Suresh…
