Don't make these 3 trading mistakes

Jul 9 18:23

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 (Fear of Missing Out) 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 (Profit and Loss), 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 making 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, and 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.

This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more

After AI-linked tech pushed the $Nasdaq (NDAQ.US)$ and $S&P 500 Index (.SPX.US)$ to record highs last week, markets face another catalyst-he Show More

Don't make these 3 trading mistakes

FAQ