#TradingMistakes101

Here are 5 critical trading mistakes and how to avoid them, distilled into 100 words:

1. **Trading Emotionally**

Letting fear or greed drive decisions causes impulsive actions like premature exits or revenge trading. *Solution:* Follow a strict trading plan and use tools like stop-loss orders to enforce discipline .

2. **Poor Risk Management**

Overleveraging or risking too much capital per trade leads to significant losses. *Solution:* Never risk >1–2% of your account per trade; always set stop-loss and take-profit levels .

3. **Overtrading**

Excessive trading increases costs and deviates from your strategy. *Solution:* Stick to predefined setups and avoid FOMO-driven trades .

4. **Chasing Tops/Bottoms**

Trying to time exact market reversals often results in losses. *Solution:* Wait for confirmation (e.g., break of support/resistance) instead of predicting turns .

5. **Inadequate Preparation**

Trading without a tested strategy or education leads to failure. *Solution:* Practice via demo accounts and backtest strategies using tools like Bookmap .