Trading is 90% planning, 10% holding on for dear life. In this meme stonk world, even the best of us have made these mistakes:
1. Not having a plan: The #1 mistake most traders make is not having a plan or not following one.
Try this instead: Avoid FOMO by setting up a paper trading account to simulate buying and selling without risking real money.
2. Overtrading or revenge trading: You make a few good trades, have a decent P&L and instead of calling it a day...you continue trading. Before you know it, your P&L is in the red, you’re getting emotional and doing revenge trades (i.e. forcing trades after a big loss).
Try this instead: Follow your stop loss plan, step away from your trading to regain control of your emotions, and if necessary, reassess your trading plan.
3. Scaling up too fast: Your P&L is up $200 a day, you get cocky and decide to add a zero to the end of that position. The problem with scaling up positions too fast is that it involves a lot more risk and stress that we're ill equipped to handle.
Try this instead: Stick to the original plan. Put aside a certain amount of money to trade each month, increase it incrementally over time to allow yourself to prepare for proportionally bigger losses, and minimize emotional trading.