Home Financial Trading Blog The most common trading mistakes

The most common trading mistakes

Trading mistakes

Bellow you will find the 42 most common mistakes in trading, you will probalby regonize some of them.

In order to achieve an improvement you need awareness, therefore we have chosen to collect these 44 very common mistakes when it comes to trading. It’s not bad to make mistakes as long as you learn from them and do not make the same mistake again.

1.All of a sudden starting to change your strategy after five lost business.
Losing can’t be avoided, everyone loses even the best ones. It is not necessary to change your approach after only some bad results, stick to your your approach, until you get results.

2. Not expecting the unexpected
A sudden market collapse occurs, for example, as an unexpected press release or that your internet will stop working. Always be prepared to have a permanent stoppage on site. If you let a single endless trade wipe you out, you’ve done your homework completely wrong.

3 Denying the importance of news.
Always be aware about the news, it dosent mean that you always have to buy it. But to be up to date its really important!

4. Doesn’t care about preparing
Are you the kind of person who just closes your computer, starting the trading software and just dives straight into the programs?
Please dont! You shoud have a detailed trading plan for future trading opportunities.

5. Never doing post-trading analysis
If you expect to be a successful trader, you should carefully analyze your business and plan the next move. Exactly like all the professionals in this industry does.

6. Not keeping a journal over the trades
If you claim that you do not need a trading diary, you have absolutely no future in trading.

7. Dont putting all your effort in to learn about the method
If you jump from method to method and think that you will suddenly be able to find the superior method, you are out on the wrong track. Instead, accept that there is no perfect method, it’s about your own abilities, understanding and strategies.

8. Failing to adapt to changing markets
You have now found a consistent way to earn money and are happy with it, so you start to lean back. DO NOT LEAN BACK! The financial market constantly changes and develops organisms. If you do not adjust, you will be out of control soon again.

9. Hindsight is influence your trades
Normaly amateur traders see a trade when they have gone out and then finds out that they have gone too early. Its also common that beginners to find reasons why a trade was a loss nad then change their entire trading strategy in place. Do as the professionals instead, collect data and makes trained trades decisions based on a sufficiently large sample size.

10. Do not understand the difference between long-term and short-term perspectives
You can never control the results of your business and do not anticipate the results of your next two, three business or more. But in the long run, this does not even mean anything, if you have a strategy with a positive expectation and following the strategi in all conditions you will earn money.

Traders sentences!


Trading mistakes


11. The smaller the loss, the less risk
The potential risk in the trade is not related to the distance of your stoppage. When risks are measured for potential losses, you must set the distance related to the winn level and the trades size. Otherwise, you can not get an idea of the potential risk.

12. You can measure the performance with the pips
A pip measurement is completely random and has no value for expressing the performance. Pips are always relative. So if a trader starts talking about comparing profits in the form of pips, they have no idea what they’re talking about.

13. To argue that profit rate and risk: reward ratio is useless
Winrate or a risk reward ratio really has no value, together they are all a trader needs to determine their future trading performance. The most powerful concepts are reward ratio and winrate, the combination of risk.

14. Making claims likes this one!
“Make up to $3000 per day daytrading”
That someone tries to fool you immediately notice the talk about absolute numbers in the trade. A possible return can only be expressed as a percentage. Talking about the risk, it is a pointless and dangerous thing to indicate potential profit.

15. Blaming algorithm and HFT
The reason you can not make money is not the HFT or algorithms.
High frequency trading and algorithms are nothing but new technology that changes how the game is played. Many traders have been afraid that computers, phones and the Internet will be able to destroy trading opportunities. Then go back to item #8 and read again.

16. Believe strictly on price forecasts
How can anyone know what will happen in the future? It is totally impossible to predict a price in the future. You will find a handful of people who guess right about the future prices: traders, economists or so-called “trading giants”, there’s plenty, the likelihood that one of these is lucky is big. But keep in mind, do not be blind and follow someone who has a regular trip.

17. Killing it to describe your trading day and using words like casino, boring and firework.
The market always goes down, sometimes fast and sometimes a bit slower. This is the nature of how the financial market behaves. If you are looking for excitement and that’s the only reason you trade, then you will not be long-lasting in this industry. Use a professional mindset with appropriate language instead of letting your emotions take over, emotions will just lead you into an emotional trade.

18. You have begun to use words like absolutely never and always talking about what’s going to happen
Setting up absolute terms in trade is extremely dangerous. Even if you have experienced that a certain setting has worked to 100% in the last 25 times, you may as well fail the 26th time. Therefore, always use stop loss orders or take a bigger position, regardless of whether you put the prices strong against you or not, there is no excuse for not using it!

19. Talking about trading with the words “hope”, “wish” or “feel”.
Do you hear yourself thinking or saying that you hope or wish the price appears in a certain way? Quit your trade immediately and do not shop anymore. It is important that Traders rely on real facts and trade / sell based on actual statistics. As I mentioned earlier, trades based on feelings is a major reason why retailers fail.

Risk & Money Management

Trading mistakes

20. Watching your floating P&L all the time
Do not monitor your account by looking at exactly on each up and down all the time, this leads you to emotional trade decisions.

21. Always think about what you can do with your current profit or what you could have done with the loss you can take
Risk only so that you are prepared to lose comfortably.
Biggest enemy is getting too greedy and afraid as a trader. Be careful not to be sloppy and skip trade rules and risk management.

22. Uncrease your risk by Not paying any attention to correlations.
Financial markets are highly correlated! It is common for traders to believe that by taking multiple business in different instruments, they diversify and lower their risks. However, these traders do not realize (especially if trading instruments are related in any way) that they often move synchronization and then instead of reducing the risk you actually increase it.

23. Use a fixed-stop loss with the same pip amount on different instruments
Using the same shock loss with the same number of pipes on different instruments or different timeframe
clearly shows that the trader does not understand the game. There are no shortcuts for trade success!
Developing a sophisticated and tested stopping strategy is very important, as important as knowing when to enter a trade.

24. Don’t give up on your strategy
Many traders give up too fast on their strata, believe in your strategy.
Just because you lose 4.5 or 6 times in a row, the strategy does not have to be bad. Even after 10 lost business, the trading strategy is still valuable.

25. Except the truth in your trading
Extremely important to learn to deal with the losses as they are actually normal events to experience. Attempting to conceal or deny losses is a death sentence for your trading account.

26. Risking an arbitrary number of 2% on each single trade
Use a professional positioning method!
Keep in mind that settings vary in quality so learn to distinguish different grades of settings and records.

27. Ignoring the importance of spread
According to research, only 1% of all daily traders can predict profit without charge.
Spread is the cost of doing business as a trader and therefore one should find ways to minimize costs. This should be highly prized on your to-do list.

28. Selling winner but holding losers
The so-called disposition effect says that on average, merchants sell winning businesses 50% faster than they holde losing traders. According to a research study.

29. Wrong size of trading account
Both scenarios when it comes to big or to small trading accounts they are less than optimal and have negative effects on trading performance they will be the cause of emotional trading decisions.

30. Avoiding the mats and statistics in trading
You do not like math and statistics, it’s boring! However, this does not matter as a businessman, you must understand the basic mathematical concepts. In honesty, trading is nothing but juggling with the probability, calculating odds and using them at your service.

Trade Management

Trading mistakes


31. Don’t care about having a trade checklist
As a novice trader, you should have a checklist that you review before entering a trade. A checklist
namely significantly increase your performance.
In addition, it can keep you away from business that does not match your criteria as well as increase your discipline.

32. Widening your stop loss order when you see price going against you
In case of a stop loss, you must accept that your trade page is incorrect.
Improving an order for stop loss signals that your emotional responses have taken over and you can no longer make good trade decisions.

33. You think ypu get more flexibility buy using mental stops
There is none advantages in a mental stop whatsoever!

34. Trying to get your losses to a breakeven point
Moving a stop loss to break even is a sign that you are afraid. You are afraid to make a loss and give back winnings. Therefore, if it’s not part of your trading strategy and you can statistically verify that you can move a breakdown to the breakeven, it’s the optimal approach, dont do it.

35. Moving your stops too close
Learn how to distinguish between small retracements and reversals.
The price will always move in waves and it’s your task to give the business space to “breathe”. Moving a stop loss to close to the current price will often lead to your winning winnings.

36. The big round numbers or known moving averages
Experienced actors are aware that retail is lazy. That retail traders only choose what is obvious and simple. Which makes it even easier to use this knowledge for its own benefit. The research shows that the price behaves considerably differently at round numbers and that the rate of reversal is higher even in such places.

Common Sense

Trading mistakes

Trading mistakes

37. Expectation of becoming rich
The illusion in the trading industry is that with sufficient leverage, the right trading strategy and little luck can be a big cash advance. But please if you lose money month after month as a trader and still believe that the only reason why you not becoming a millionaire is that you have not found the right strategy yet. Time to wake up!

38. Treating trading as a business?
To achieve success, you need to spend time just like in bulding companies. It’s not necessary hard but it’s about the attitude of you as a trader. You need to test different ideas, calculate and analyze data, tweaking, continuous self-improvement, preparation, journalization and discipline. If you do not have the energy or time to put on these things, you will never succeed either.

39. Do you think the price can not move higher / lower?
You will always find traders who week after week tells that the turn is imminent and they are looking for short entries, even though the price has been in a long-term rally for several months.
The best part is to focus on what is obvious and join the trend as long as it is possible.

40. Cursing Indicators while praising candlesticks
They are about how to apply the strategy, adjust the parameters and handle yourself as a trader. Whether you’re dealing with price or as a result of indicator-based trading strategies, it does not make any difference to your chance of success as a businessman. Although people will tell you, the strategy you choose does not affect your trade success.

41. Take the time to always analyze your daily trading performance
Always remember that trading is a long-term business and you can not influence the outcome of your business. So do not try to be profitable every day, week or month. However, you must find a method that has a positive expectation, apply it at all costs and continuously monitor every little aspect of your achievement. Do not try to win business, the markets show you who the boss is.

42. Are you following advice from random people? DON’T!
“Give a man a fish, and you feed him for a day, show him how to fish, and you feed him for a lifetime.”
Do not take your decisions based on other people’s opinions, tweets or promises.