Ten typical trading errors


#1

The following typical trading errors have a specific cause rooted in a thinking methodology that can be changed.

  1. Refusing to define a loss.

  2. Not liquidating a losing trade, even after you have acknowledged the trade’s potential is greatly diminished.

  1. 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.”
  1. 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.

  2. Revenge-trading as if you were trying get back at the market for what it took away from you.

  3. Not reversing your position even when you clearly sense a change in market direction.

  4. Not following the rules of the trading system.

  5. 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.

  6. Not acting on your instincts or intuition.

  7. 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…:grinning::pray:


50 Time Tested Classic Stock Trading Rules
#2

Nicely summarized


#3

lols … when i started trading , i would try to make money from the same stock in which i lost


#4

taking leverage is the biggest mistake IMO … if one is trading within his capital limits all psychology will automatically fall in place, all rules will automatically be followed, thus leaving no or less room for error resulting in success.


#5

Some old wise trader told an young trader that

“reduce your position and leverage so much that you don’t have to worry about your sleep every night”.

@RahulN… you are right about leverage…


#6

@VelmuruganSengottai…you must be ninja warrior then… just kidding…its interesting , how when we lose, we want to make money from same stock even though there are many opportunities available