Lesson No. 2: The #1 Mistake That Costs Traders Money – And How to Avoid It
Trading is all about timing and precision. Most traders know the patterns, they understand the basics — yet they still lose money. Why?
Because they enter too early or too late, and place stops in obvious spots where the market loves to hunt them.
Let’s talk about the most common mistake traders make — and how you can flip it into an edge.
The Mistake: Entering at the Breakout, Not at the Zone
Look at the left side of the chart:
Trader sees a bullish pennant or flag, and enters right at the breakout candle.
They place a tight stop just below the pattern.
Price pulls back, hits SL, then continues in the expected direction.
Result? Loss. Frustration. Repeated pattern.
This is a common issue in breakout trading: entering without confirmation or smart positioning.
A Smarter Approach: Zone-Based Entries with Patience
The right side of the chart shows a better method:
Identify Bullish OBs (Order Blocks) — zones where price previously reacted with strength.
Wait for price to return to this area.
Look for rejection signs or volume confirmation.
Place entry at the zone, with stop loss placed below the OB, not just under a pattern.
Let the trade develop with a good risk:reward profile.
This method avoids fakeouts and gives cleaner, stronger entries with better protection.
What Are Order Blocks (OBs)?
Order Blocks are simply areas where big buying or selling occurred — visible as consolidation before strong moves. Price often returns to these zones to fill unexecuted orders.
They work because they reflect real demand and supply — not just pattern psychology.
