#TradingMistakes101

Top 10 trading mistakes

Not researching the markets properly.

Trading without a plan.

Over-reliance on software.

Failing to cut losses.

Overexposing a position.

Overdiversifying a portfolio too quickly.

Not understanding leverage.

Not understanding the risk-reward ratio.

What is the biggest mistake in trading?

Taking too big positions

But as proven time and time again, taking too big a position on a trade can be risky. There is no guarantee the trade will go the way you want it to go. So, if you risk 50% of your capital in a single trade and that trade turns against you, it will seriously decrease your trading capital.

Why do 90% of traders lose?

The emotional aspect of trading often leads to irrational decisions like panic selling. When the market moves unfavourably, many traders, especially those who are inexperienced, tend to panic and exit their positions hastily. This panic selling often occurs at the worst possible time, leading to significant losses.

What is the 7% rule in stocks?

AI Overview

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The 7% rule in stocks, often referred to as the "7% sell rule" or "7% stop-loss", is a trading strategy that advises selling a stock if it falls 7% or 8% below the price you initially bought it for. This rule aims to protect capital by cutting losses early, according to Tradetron and StockPe.