Here are the seven sins that traders commit that put them in the unprofitable purgatory of the markets.
- Sloth: The belief that trading is easy money new traders to be lazy and not put in the work at first to develop their own trading system and plan before trading. Work is required to learn how to trade and work in watching markets for your signals is not an option. Lazy trading is bad trading.
- Lust: The lust for material things causes traders to spend profits instead of compounding their capital. The goal of a trader should first be freedom and financial security not Lamborghinis and mansions.
- Pride: The inability to admit you are wrong in a trade can turn a small loss into a big loss.
- Wrath: Revenge trading is a path to doing more of the wrong thing. Being mad at a market that does not know you exist is illogical and irrational and leads to bad decisions.
- Greed: The fastest way to go broke in trading is by trying to get rich quick. The desire to get rich quick leads to bad decisions when speed to profits is the number one priority over common sense.
- Envy: Worrying about what other traders or investors are doing or how much markets you do not trade are trending is a waste of mental effort. Focus on your own system and process to keep your own edge.
- Gluttony: Trading too big, chasing a trend that is already extended, and over trading are all signs of doing a lot where less is much more healthy for your trading.
“But it is not a game for the stupid, the mentally, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.” – Jesse Livermore
Go and sin no more.