#TradingMistakes101

Here is an analysis of common trading mistakes, often tweeted under the hashtag #TradingMistakes101, to help you avoid them:

1. Lack of a Trading Plan (or not sticking to it):

Mistake: Entering trades without a defined strategy, entry/exit points, risk management rules, or position sizing. Or having a plan but deviating from it due to emotions.

Why this mistake is bad: It leads to hasty decisions, inconsistent results, and often significant losses.

How to fix it: Create a comprehensive trading plan and adhere to it strictly. This includes your strategy, risk per trade, maximum drawdown, and emotional control rules.

2. Emotional Trading (Fear and Greed):

Mistake: Allowing emotions to dictate trading decisions.

Fear: Panicking and selling good trades prematurely, or hesitating to enter profitable trades.

Greed: Holding onto losing trades for too long in hopes of a trend reversal, or overtrading after a few wins.

Why it's bad: Emotions are the antithesis of rational decision-making in trading. They lead to buying high and selling low.

How to resolve it: Develop your discipline, practice emotional detachment, and rely on your pre-prepared trading plan. Mindfulness and journaling can help you.