#TradingMistakes101
Avoid Common Trading Mistakes
Avoiding common mistakes is the cornerstone of successful trading. Here are some of the most prominent mistakes that traders make and 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 deadliest mistake. Do not put all your eggs in one basket, and do not risk money you need for your daily life.
* Trading Based on Emotions Fear and greed are a trader's enemies. Making decisions based on emotions rather than logical analysis often leads to disastrous results.
* Chasing Markets (FOMO) Seeing stocks rise sharply can make you feel like you’re missing out, prompting you to enter trades too late, which may end in losses.
* Neglecting Risk Management Not placing stop-loss orders or failing to determine the risk size for each trade exposes you to significant unexpected losses.
* Not Learning from Mistakes Every trader makes mistakes, but a successful trader is the one who analyzes their mistakes and learns from them to avoid repeating them in the future.
* Overtrading Excessive trading can lead to capital depletion and distraction. It’s better to focus on a few high-quality trades.