My Biggest New Trader Mistakes & Lessons Learned
I thought I'd share my experience with other New Traders (I'm still 'new', 2yrs in). I made all the classic mistakes and plenty more, my learning is only just beginning.
Hopefully this educational post helps others new to trading.
Use a Stop Loss
So many times I didn't use a Stop Loss. One of the main reasons was I kept getting Stopped Out and then the price reversed, it made me paranoid. Also when the day changes at the start of the Asia session, or over the weekend with the gaps on market open, I thought I was better not having one.
I've Learned: If you don't use a Stop Loss it's psychologically hard to get out of a losing trade and you can easily blow your account. I think it's OK to move the stops temporarily before the Asian open, but ideally the trade would only be left open if a) it's well in profit and b) the move looks likely to continue.
Don't move your SL & TP
I kept moving both of these stops, I either couldn't face the actual loss when a trade went bad (it seemed less real on paper and there was always 'the chance' it would come back in my favour) or I got greedy when the trade went in my favour and then before I knew it, it reversed and my profit was gone.
I've Learned: Moving Stops and Targets risks profitable trades; it's psychologically damaging as it suggests lack of planning and strategy, this is gambling. On the other hand, having a plan and seeing it playout, however big or small is hugely satisfying and is the best confidence builder.
Get In and Out
I kept looking for the really big moves, and I had a few, but only a few. I believe the longer you're in a trade, the riskier it is due to the many factors that can affect price - Institutions, Fundamentals, Global Events, there are so many things that can turn a good strategy bad, and I lost money.
I've Learned: There are so many trading pairs, so many options, there'll always be another trade. Staying in a trade for too long is leaving money on the table, when it could be in your account, getting out too early is annoying, but having profit on the trade is much more important.
Leaving trades over a weekend
I've left both winning and losing trades over a weekend, and many times previously winning trades went against me, and losing ones got worse. Price can be unpredictable due to fundamental changes over a weekend.
I've Learned: On a Friday, unless 80% happy that your trade will continue in the right direction over the weekend, close it and review again after market open (you may lose a few but you will have banked profits or minimised losses in many cases).
Keep Fundamentals in mind
I follow some traders who don't seem to care about Fundamentals, but in that time I've seen many of their signals go bad because of big news. I think, that they think, that if the news is in their favour they reach target quicker. If it's not, they reach target slower, as the market has already decided future price regardless. I've seen fundamentals shape both shorter and longer term trends, they can easily cause reversals and commonly they cause spikes in the opposite direction from what you'd expect, before then moving as you'd expect, but this can be too late.
I've Learned: Each pair / trade is different, however I've learned to take a pragmatic approach, often getting out of a trade before the news and waiting for the market to calm down before considering re-entering. This can mean missing out, but too many times I was on the wrong side of the news, I'm more profitable stepping back first.
Have positive involvement in the TradingView community
From time to time I see comments on Trader's ideas that are less than positive, as though the commentator can predict the future? As a community of retail traders we are up against the institutions and the big money movers who love to take retail traders' money, this means as retail traders we're all on the same team. The total value of all of our accounts is like comparing the size of an atom to a planet!
I've Learned: If you don't like someone's idea, move past it, or discuss professionally. Be open-minded to ideas and celebrate success, 'like' ideas that you like and give positive comments where you agree, we're all in this together, and everyone is trying their best.
Do your own research
I signed up to loads of Telegrams and followed signals blindly, and it cost me a lot. It's too easy for people giving signals to only report on the successful ones. The community around trading, particularly TradingView is awesome but it can be confusing, for every chart, for every pair there is so much subjectivity. Previous price action does not dictate future price movement, if it did everyone would win.
I've Learned: Don't put your destiny in the hands of others, read and learn as much as possible but create your own plan and strategy, it's much more rewarding, both psychologically and for me, financially.
Take a Break
I was watching the charts of my trades almost constantly, whether up or down I was watching them, but not doing anything. If losing (without a SL) I'd be watching hoping it would come back, if winning I'd often manually close too early, or leave it too long (FOMO) and it was too much and made no positive impact on my trading success, it just caused stress.
I've Learned: To create my plan with all of these lessons in mind, and action it if the conditions are right. If I'm working on my personal trading development now, I'm looking for future trading opportunities, I'm setting alerts for future price action, I'm writing and publishing my ideas, and most importantly I'm taking a break to enjoy weekends, holidays and normal stuff!
Writing and publishing this education article is really cathartic for me, it's helping me to keep embedding the lessons I have learned. The best lessons are the hardest ones, the expensive ones!
I've just started publishing my ideas on here and I appreciate all the support I can get to becoming a better trader, hopefully one day I can be good enough to do this full-time.
It'd be great to know if you've experienced these and other lessons as a new trader.
Are there any more that you can share with me, and the rest of the TradingView community?
Hopefully this educational post helps others new to trading.
Use a Stop Loss
So many times I didn't use a Stop Loss. One of the main reasons was I kept getting Stopped Out and then the price reversed, it made me paranoid. Also when the day changes at the start of the Asia session, or over the weekend with the gaps on market open, I thought I was better not having one.
I've Learned: If you don't use a Stop Loss it's psychologically hard to get out of a losing trade and you can easily blow your account. I think it's OK to move the stops temporarily before the Asian open, but ideally the trade would only be left open if a) it's well in profit and b) the move looks likely to continue.
Don't move your SL & TP
I kept moving both of these stops, I either couldn't face the actual loss when a trade went bad (it seemed less real on paper and there was always 'the chance' it would come back in my favour) or I got greedy when the trade went in my favour and then before I knew it, it reversed and my profit was gone.
I've Learned: Moving Stops and Targets risks profitable trades; it's psychologically damaging as it suggests lack of planning and strategy, this is gambling. On the other hand, having a plan and seeing it playout, however big or small is hugely satisfying and is the best confidence builder.
Get In and Out
I kept looking for the really big moves, and I had a few, but only a few. I believe the longer you're in a trade, the riskier it is due to the many factors that can affect price - Institutions, Fundamentals, Global Events, there are so many things that can turn a good strategy bad, and I lost money.
I've Learned: There are so many trading pairs, so many options, there'll always be another trade. Staying in a trade for too long is leaving money on the table, when it could be in your account, getting out too early is annoying, but having profit on the trade is much more important.
Leaving trades over a weekend
I've left both winning and losing trades over a weekend, and many times previously winning trades went against me, and losing ones got worse. Price can be unpredictable due to fundamental changes over a weekend.
I've Learned: On a Friday, unless 80% happy that your trade will continue in the right direction over the weekend, close it and review again after market open (you may lose a few but you will have banked profits or minimised losses in many cases).
Keep Fundamentals in mind
I follow some traders who don't seem to care about Fundamentals, but in that time I've seen many of their signals go bad because of big news. I think, that they think, that if the news is in their favour they reach target quicker. If it's not, they reach target slower, as the market has already decided future price regardless. I've seen fundamentals shape both shorter and longer term trends, they can easily cause reversals and commonly they cause spikes in the opposite direction from what you'd expect, before then moving as you'd expect, but this can be too late.
I've Learned: Each pair / trade is different, however I've learned to take a pragmatic approach, often getting out of a trade before the news and waiting for the market to calm down before considering re-entering. This can mean missing out, but too many times I was on the wrong side of the news, I'm more profitable stepping back first.
Have positive involvement in the TradingView community
From time to time I see comments on Trader's ideas that are less than positive, as though the commentator can predict the future? As a community of retail traders we are up against the institutions and the big money movers who love to take retail traders' money, this means as retail traders we're all on the same team. The total value of all of our accounts is like comparing the size of an atom to a planet!
I've Learned: If you don't like someone's idea, move past it, or discuss professionally. Be open-minded to ideas and celebrate success, 'like' ideas that you like and give positive comments where you agree, we're all in this together, and everyone is trying their best.
Do your own research
I signed up to loads of Telegrams and followed signals blindly, and it cost me a lot. It's too easy for people giving signals to only report on the successful ones. The community around trading, particularly TradingView is awesome but it can be confusing, for every chart, for every pair there is so much subjectivity. Previous price action does not dictate future price movement, if it did everyone would win.
I've Learned: Don't put your destiny in the hands of others, read and learn as much as possible but create your own plan and strategy, it's much more rewarding, both psychologically and for me, financially.
Take a Break
I was watching the charts of my trades almost constantly, whether up or down I was watching them, but not doing anything. If losing (without a SL) I'd be watching hoping it would come back, if winning I'd often manually close too early, or leave it too long (FOMO) and it was too much and made no positive impact on my trading success, it just caused stress.
I've Learned: To create my plan with all of these lessons in mind, and action it if the conditions are right. If I'm working on my personal trading development now, I'm looking for future trading opportunities, I'm setting alerts for future price action, I'm writing and publishing my ideas, and most importantly I'm taking a break to enjoy weekends, holidays and normal stuff!
Writing and publishing this education article is really cathartic for me, it's helping me to keep embedding the lessons I have learned. The best lessons are the hardest ones, the expensive ones!
I've just started publishing my ideas on here and I appreciate all the support I can get to becoming a better trader, hopefully one day I can be good enough to do this full-time.
It'd be great to know if you've experienced these and other lessons as a new trader.
Are there any more that you can share with me, and the rest of the TradingView community?