Ok, I am going to say it – trading has way too many bells and whistles. Sometimes it is too complicated. Sometimes we wish it would be easier and more enjoyable. But the truth here is that more often than it would be acceptable we are messing up our trading all by ourselves.
That’s right. The time has come for us to give ourselves a good hard look and admit – we are messing up a lot. Especially it is true for beginners and those who are more used to long trading as there is no need to be in the markets every day with long trading.
Admitting is the first step to resolving the situation. Now we need to understand – what it is that we do to mess up our trading?
The first part can be found here.
7. We forget about news releases.
8. We do not put down a stop loss.
9. We are trading with no target.
10. We do not keep a record.
11. We risk too much.
12. We over-analyze the trade.
7. We forget about news releases.
What is the point of all those alerts and all those reminders if in the end we still prefer to rely on our memory and fail? When it comes to important news releases we seem to forget all about them until its results are shoved right into our faces. We tend to remember about an important report or other piece of news too late and because of this we pare losses.
Tracking and being very careful around key information announcements – that is the main point here. NOT ignoring them – following them.
8. We do not put down a stop loss.
A lot of us prefer to live dangerously. And that rarely brings us any good. Has this ever happened to you – you decided not to put down a stop loss and instead wanted to watch the chart? But then you started craving coffee and some sandwiches? You went to make yourself some, came back and all of your money went away? Well, that would never happen if you only had the habit of putting down a stop loss order.
A lot of trader have burnt themselves on this and I pray you are not going to become one of them.
9. We are trading with no target.
We need to have some idea of why we are trading. We need to have a goal and a plan. Otherwise you are not going to have any earning points that you have to hit on your way up. And that can be dangerous as you are not going to have any motivation to earn and losses are not going to seem like such a big deal to you. But they are.
10. We do not keep a record.
Quite often we fail to record our trades. And why do we need an actual pencil and a journal you will ask? Well of course in computer era it is a valid question, but here doing thing the old-fashioned way is going to pay off at some point.
Having all of your trades recorded is not to go anywhere, but you might switch brokers and trading signals provider. Your trading history might be gone, but not if you write it down in a ledger. And you are going to want to see this info as there is no better school than the one we are putting ourselves through.
11. We risk too much.
We tend to over exaggerate things as in the markets any tiny detail can become fatal to the trade. That is why for us it is natural to put a trade larger than we can afford. And a lot of times trades like that burn out. And do not bring us a desired result. In this case the only thing that is left for us is to wish that we hadn’t risked that much.
12. We over-analyze the trade.
Choosing a proper trading indicator is one thing, but choosing and implementing all of them can become a really big mistake. Overloading your screen and your mind with unnecessary information and indication is going to do you more harm than good. Excessive information is going to cloud your judgment and not let you think straight. Better to rely on 1 or 2 indicators, trading signals and your own knowledge of the market.
