These three mistakes will doom your trading day, week, month and career.
1. Not having a trading plan.
It almost doesn’t matter if you have a good plan or a bad plan all that matters is that you have a plan.
Most new traders know so little about trading they figure they’ll make it up as they go along – a big mistake that means most new traders don’t last long.
Before you risk a dime, even before you open an account, you must be willing to spend the time to make a trading plan (assuming you want to be part of the successful minority).
Trading, like anything worthwhile and potentially lucrative, requires learning new skills, practicing and evaluating your results.
You must have a plan to work to or you’ll simply drift with the currents and eventually into the rocky shoals.
Trading requires a certain level of contrary actions – you must zig when your emotional brain says zag.
If you have a plan, you’ll find it much easier to make the right moves, no matter what it feels like. A plan also gives you a basis to evaluate your actions and results – eliminating rationalizations.
Either you followed the plan and are successful or you did not; irrespective of how any individual trade added or subtracted from your account balance.
2. Forgetting that the purpose of trading is to make money.
If you want to be right, instead of rich, play a game like Trivial Pursuit.
If you want excitement, ride a Harley.
If you want to belong to a group, join the Rotary.
Only consider trading if you honestly want to make money.
If you’re desperate for money though, trading isn’t the place to bet your last dime. If it’s a steady income you seek, get a job.
We don't start taking out steady profits until compounding has taken over and 5-10k per month withdrawals still don't slow down the growing account.
3. Taking it personally.
Traders must be able to separate what happened with their trades from their feelings.
Admitting you (or your system) was wrong, making adjustments and moving on to the next trade is just part of trading.
Same when your trades go well. Instead of an emotional celebration, successful trader’s analysis profitable trades, just as they do the unprofitable trades, make any adjustments and move on to the next trade.
Got a good story that illustrates these points? I’d be happy to hear your feedback.
Helping you retire on time,
Big A
800-743-0385
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Your Comment about IGNORING STOPS really hit home .I had $70,000 in October 2010 and got it up to $400,000 in a year by tarnidg leveraged/inverse Direxion ETFs .then this rally since the October low knocked off about a THIRD of it because like a dumba$$ I didn't use stop losses and couldn't believe the rally would continue. I shouldn't complain about having $260,000 left, but STOP LOSSES might have saved me some of that $140,000 that was lost.
I usually have a plan.