What is it that distinguishes winners and losers amongst stock traders? To become successful with
trading stocks, you should avoid the following mistakes traders make.
1. They trade when they shouldn't
Not every day is a good trading day. The market might be chopping around, stocks might be gapping
etc. Traders should realize that they don't have to trade all the time.
2. Poor Risk Management
Traders have to maintain discipline and control their emotions. The key is to risk very small
amounts of your accounts equity only. A simple guideline is don't risk more then 2 % of your account
per trade.
3. They trade without a trading method or trading plan
Many tarders tend to go on impulse or hot tip instead of trading with a method or plan.
A good trading method or plan would provide the trader with search-criteria to identify appropriate
stocks for trading, setup conditions- and entry-rules and initial stop-points and an exit strategy.
In addition a good trading routine is needed to manage open positions and identify new
opportunities.
4. They don't know when to take profits or when to protect gains
Because they don't have a good exit-strategy, many traders are not able to take profits or
protect theirgains. Many stock traders don't take profits when they should and leave a ton of money
on the table by getting out when they shouldn't. TheyI bail out to early on a trade or let their
trade run when the market is againstthem.
5. They cling on to losing positions
Without a proper mindset and proper stop-loss points set, traders tend to "hang in a little bit
longer". Because they want to be right about the trade.
That can have fatal consequences for their accounts
Conclusio: Reviewing these mistakes it's clear to see that successful stock
traders have a special mindset that helps them trade with discipline. This discipline enables them
to deal with their emotions on the one hand, and on the other hand to follow their trading methods
and trading routine. Good trading methods and routines help them to do a proper Risk Management, to
take profits and to protect their gains.
You can watch some videos on the mistakes traders make here.
