As a professional trader, I've observed that 99% of traders experience losses not because of their skills or knowledge, but due to their bad trading habits. Today, we'll address some of these habits and propose effective fixes to overcome them.
1) FOMO (Fear of Missing Out):
Problem: The fear of missing out on potential gains prompts traders to enter trades impulsively.
Fix: To combat FOMO, it's crucial to close social media platforms like Twitter during trading sessions. Avoid getting caught up in unnecessary information that triggers FOMO habits.
2) Fixing Consistency:
Problem: The temptation to increase risk after a series of wins in pursuit of larger profits driven by greed.
Fix: Establish a consistent approach by risking a predefined dollar amount on every single trade. This consistency is key to long-term success and helps avoid irrational decision-making.
3) Invalidations:
Problem: Switching between hard and soft stop losses, hesitating to close trades quickly when using a soft stop loss.
Fix: Keep track of 100 trades and note the type of stop loss used for each. Evaluate and analyze which type yields the best results, allowing you to refine your strategy accordingly.
4) Hoping:
Problem: Placing limit orders at support/resistance levels, hoping for a reversal without a systematic method of execution.
Fix: Develop a systematic approach to trade execution based on statistical analysis. Enter trades with confidence, relying on your well-defined strategy rather than relying on hope.
5) Trading without Stop Loss:
Problem: Holding losing trades with the hope that the price will eventually recover.
Fix: Cut losses early by implementing proper stop loss levels. Focus on trades with good risk-reward setups, aiming for higher profits. Remember, the trend is your friend, and it's best not to go against it.
1) FOMO (Fear of Missing Out):
Problem: The fear of missing out on potential gains prompts traders to enter trades impulsively.
Fix: To combat FOMO, it's crucial to close social media platforms like Twitter during trading sessions. Avoid getting caught up in unnecessary information that triggers FOMO habits.
2) Fixing Consistency:
Problem: The temptation to increase risk after a series of wins in pursuit of larger profits driven by greed.
Fix: Establish a consistent approach by risking a predefined dollar amount on every single trade. This consistency is key to long-term success and helps avoid irrational decision-making.
3) Invalidations:
Problem: Switching between hard and soft stop losses, hesitating to close trades quickly when using a soft stop loss.
Fix: Keep track of 100 trades and note the type of stop loss used for each. Evaluate and analyze which type yields the best results, allowing you to refine your strategy accordingly.
4) Hoping:
Problem: Placing limit orders at support/resistance levels, hoping for a reversal without a systematic method of execution.
Fix: Develop a systematic approach to trade execution based on statistical analysis. Enter trades with confidence, relying on your well-defined strategy rather than relying on hope.
5) Trading without Stop Loss:
Problem: Holding losing trades with the hope that the price will eventually recover.
Fix: Cut losses early by implementing proper stop loss levels. Focus on trades with good risk-reward setups, aiming for higher profits. Remember, the trend is your friend, and it's best not to go against it.