Avoid Common Trading Mistakes

Avoiding common mistakes is the cornerstone of successful trading. Here are some of the most prominent errors traders make that you should pay attention to in order to avoid them:

* Lack of a Clear Trading Plan: Starting to trade without a defined strategy is like sailing in a rough sea without a compass. The plan should include entry and exit points, risk management, and position size.

* Risking More Than You Can Afford to Lose: This is the most fatal mistake. Don't put all your eggs in one basket, and don’t risk money that you need for your daily life.

* Trading Based on Emotions: Fear and greed are the enemies of traders. Making decisions based on emotions rather than logical analysis often leads to disastrous outcomes.

* Chasing the Markets (FOMO): Watching stocks rise sharply can make you feel like you are missing out, prompting you to enter trades late, which may end in losses.

* Neglecting Risk Management: Failing to set stop-loss orders or not determining the risk size for each trade exposes you to significant unexpected losses.