#TradingStrategyMistakes Inadequate Trading Plan:
Having no plan at all: Many new traders jump into the market without a clear, written plan that includes their entry/exit points, risk management, capital allocation, and profit targets. This leads to unplanned and random trading.
Not sticking to the plan: Even with a plan in place, traders often deviate from it due to emotions or external influences. A plan is only effective if it is consistently followed.
Lack of research: Trading based solely on speculation, tips, or incomplete information without a thorough market analysis and understanding of asset dynamics.
2. Poor Risk Management:
Failure to minimize losses: Holding onto losing trades in the hope that the market will recover, which can lead to significant losses.
Not using stop-loss orders: Stop-loss is essential for automatically limiting potential losses, but many traders either do not use them or cancel them when the trade goes against them.
Over-leveraging: Using too much borrowed capital (leverage) can amplify both gains and losses, and even a small market movement can wipe out your account.