9 common trading mistakes that stand in the way of your profitability.

Today we are keeping on with our week dedicated to mistakes in trading that draw us further away from gains and wins. Is you are only joining us now, here is the first part of our discussion.

So, ready to move on to the second part? Here is what we are going to discuss today.

Mistake №10 – going into daily trading without preparations.

Mistake №11 – trading without a plan for the day.

Mistake №12 – discarding win rate and risk-reward ratio.

Mistake №13 – you believe in price forecasts.

Mistake №14 – you are too sharp and use absolute terms.

Mistake №15 – you are going into trades because you ‘feel like it’.

Mistake №16 – discarding correlation.

Mistake №17 – you do not have a trading checklist.

Mistake №18 – taking a stop loss that is too close to the price.

Mistake №10 – going into daily trading without preparations.

Let us guess – you make yourself a cup of coffee, turn in your computer, Queen’s WE ARE THE CHAMPIONS blasting through your speakers and you just go for it? Well, while that sounds AWESOME, we have to admit, that before starting your trading day you absolutely need to go into a little bit of a research – read up the news from the political and economic worlds. Only after that you are going to be able to make an informed decision about the best possible trades for you for a certain day.

Mistake №11 – trading without a plan for the day.

You can be prepared and most informed trader in the whole world. but let’s admit. There is no way you can start trading without a trading plan for the day. You need to set several assets that might bring you success and focus on them. Do not make your trading decisions on the spot. That is only going to bring you more losses.

Mistake №12 – discarding win rate and risk-reward ratio.

Saying that these nifty tools are useless can be viewed by trading community as wards coming from a very unexperienced don’t-know-what-the-are-talking-about traders. of course alone win rate and risk-reward ratio are not going to do a lot of good, but combined together they are telling traders whether they are going to be successful in the current trade. Combination of the two is one of the most useful and powerful trading tools out there.

Mistake №13 – you believe in price forecasts.

Of course there are times when traders and market experts are getting lucky and guess the price just to the point. But that is plain luck – that’s it, there is nothing more to it. It is in fact impossible to predict price of the asset for the future. markets are too volatile and unpredictable for the sixth sense like that to work on them.

Mistake №14 – you are too sharp and use absolute terms.

NEVER and ALWAYS are the two words that are supposed to be left outside tour trading space. That is a golden rule. Saying that the price is ALWAYS going up or is NEVER going to fall beyond some level has done no one any good. On the contrary. Such believes are only harming you as you are not going to aim higher that a certain level if you believe that the price for the asset is NEVER going to go higher.

Mistake №15 – you are going into trades because you ‘feel like it’.

No. that’s is simply a no. You need to understand why you are going into a certain trade and why the asset is performing the way it is performing. Basing your trades and earnings on a simple feeling is not actually a good motivation for you. plus, as bad as it might be to admit, your feelings, especially about the behavior if the market can be wrong.

Mistake №16 – discarding correlation.

Correlation between the two tied assets is a powerful thing, for example, trading a dollar including forex couple as well as gold can help from both sides. Movement of dollar can actually tell you a lot about other assets like precious metals, oil, euro and other, that is why it is better to diversify your trades and see the correlation between all of them. That can be useful for the future trades.

Mistake №17 – you do not have a trading checklist.

A trade has to check out certain points on your list. You need to be fully comfortable with each and every trade you open. That is why every trader needs a checklist. This little and seemingly unimportant tool is not going to take a lot of your time, but can actually bring much more good.

Mistake №18 – taking a stop loss that is too close to the price.

Trades, just like traders need more room to move. Now, we are not saying that you need to put stop losses which are way too far away from the current price and will get you into trouble. We are simply saying that there is no need for you to move a stop-loss to close to the current price. Give your trade some breathing space and you will see your profits go up.

That’s it for the second part of our discussion. Did you find any mistakes you need to correct? Write in the comments!