Five Things Traders Do to Destroy Themselves

Five Things Traders Do to Destroy Themselves



 

Five Things Traders Do to Destroy ThemselvesThere are things that we do as traders that set us back in our journey to success and lose us money. There are other things that traders do that just destroy themselves. Many of the following things are done daily by the 90% of traders that lose money in the market consistently. If we want to be a longer term winner trading the markets we have to take these lessons to heart and over come our natural instincts by doing the opposite.

  1. Instead of cutting a loss the trader holds it stressing over it for the rest of the day or a week. This destroys the trader’s mental capital and inflicts completely unnecessary emotional pain. The first loss it the best loss.

  2. A trader that trades their opinion instead of the price action has a lower success rate than someone who just trades price action. The vast majority of traders make money by following trends and chart patterns not their own opinion.

  3. A trader who puts on the one big trade that they think they just can’t lose on is usually the one that blows up their account. A trader must always have stops and must always manage risk regardless of their belief in any one trade.

  4. Believing that you are right about a trade and the market is wrong is a sure path to destruction. The market is always right because price is reality. How do we know when we are wrong? We lose money that is proof enough.

  5. A trader who endlessly searches for stock picks and predictions instead of  learning how to trade a robust method while managing their own mind and using risk management is doomed to failure.