#TradingMistakes101 The most common errors in trading include lack of a trading plan, relying on limited analysis, holding losing positions, incorrect position sizing, not using stop-losses, ignoring risk-reward relationships, trading with excessive emotions, and trading with inadequate risk levels.

Specific errors and how to avoid them:

Lack of a trading plan:

Develop a trading plan with clear objectives, entry and exit strategies, and risk management rules.

Relying on limited analysis:

Conduct in-depth market analysis, including technical analysis and fundamental analysis, to make informed decisions.

Holding losing positions:

Implement stop-losses and close losing positions, limiting losses and protecting capital.

Incorrect position sizing:

Calculate position size so that the risk in each trade is appropriate, usually between 1% to 3% of total capital.

Not using stop-losses:

Set stop-losses to limit losses and protect capital in the event of unfavorable market movements.

Ignoring risk-reward relationships:

Evaluate profit potential compared to risk in each trade and ensure that the risk is lower than the potential reward.

Trading with excessive emotions:

Control emotions during trades, avoiding anxiety or greed from irrationally influencing decisions.

Trading with inadequate risk levels:

Do not risk more than you can afford to lose and set a clear limit for risk in each trade.

Overconfidence after a profit:

Stick to the trading plan, even after a series of successful trades, avoiding impulsive or risky decisions.

Fear of losing:

Do not let the fear of missing an opportunity influence decisions, follow the trading plan, and avoid entering positions based on news or social media trends.

Revenge trading.