#TradingStrategyMistakes

❌ Top Trading Strategy Mistakes (and How to Avoid Them)

1. 🚫 No Backtesting or Forward Testing

Mistake: Trading a strategy live without testing it on historical data.

Fix: Always backtest your strategy over months/years of data, then paper trade (forward test) before going live.

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2. 🎯 No Defined Entry & Exit Rules

Mistake: Vague strategies like “buy on dip” or “sell when it goes up.”

Fix: Write down clear, rule-based criteria:

Entry trigger: e.g., 5-min candle closes above resistance with volume

Stop loss: % or technical level

Profit target: risk/reward ratio or trailing stop

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3. ⚖️ Poor Risk Management

Mistake: Risking too much on a single trade or no stop loss.

Fix:

Use 1–2% max risk per trade.

Always set a stop loss (mental or hard).

Use a consistent position sizing formula.

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4. 🔄 Changing Strategies Too Often

Mistake: Abandoning a strategy after 1–2 losses.

Fix: Stick to one strategy and let it play out over at least 20–30 trades to evaluate it properly.

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5. 🎲 Overtrading

Mistake: Taking too many trades, especially without strong setups.

Fix: Trade only A+ setups. Create a checklist to qualify trades. Sometimes the best trade is no trade.

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6. 📉 Chasing Breakouts or FOMO Entries

Mistake: Entering late after a breakout is already extended.

Fix: Anticipate key levels and wait for confirmation or pullback entries.