Overlooking Risk-Reward Ratios Before Entry**

One of the most frequent yet critical errors traders make is failing to define a clear risk-reward ratio (RRR) before entering a trade. Many get swept up in the excitement of a potential setup or convincing analysis, jumping in without calculating where their stop loss *should* logically be placed based on the chart structure, and what a realistic profit target looks like. They focus solely on the potential reward, ignoring the quantifiable risk. This often leads to situations where the potential loss on a single trade is disproportionately large compared to the expected gain. Even if your win rate is decent, consistently taking trades with a poor RRR (like risking $500 to make $200, a 1:0.4 ratio) is mathematically unsustainable long-term. Always calculate your RRR *before* hitting the buy/sell button; discipline yourself to only take trades meeting your minimum threshold (e.g., 1:1.5 or better), ensuring potential profits justify the risks taken. Patience is key – wait for setups aligning with your risk parameters. #TradingStrategyMistakes