Common Trading Mistakes
We all make them. Some of us, all the time. Here they are: the Top 10 Common Trading Mistakes.
1. Greed. This is the killer.
Solution: Plan the trade and trade the plan. Be happy with reasonable returns. Take the money and run.
2. Reversing Your Position.
Solution: Exit a trade according to your trading plan, not because you got spooked out.
3. Trying to Pick Bottoms and Tops.
Solution: If you did, you got lucky. Just go for part of the move. It's ok to leave some for others.
4. Lose Your Cool.
Solution: Good trading is boring trading. Plan your trade and trade your plan.
5. Waiting Too Long to Pull the Trigger.
Solution: Continually study charts and paper trade to develop the confidence. Just do it.
6. Letting Losses Run.
Solution: When the market tanks, cut loose and preserve what you have left.
7. Avoiding Stops.
Solution: At some point, you need to recognize a bad trade, even if you're down 50%.
8. Following the Crowd.
Solution: They don't know any better, why follow them? Be secure in your own thoughts.
9. Too Many Open Positions.
Solution: Stay focused on no more than several manageable positions.
10. Not Doing Your Homework.
Solution: Whatever your strategy, ensure your position is justifiable. Know your stock.
Being aware of these conditons is your first step to overcoming them. Stay detached and good trading to you!
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Information in this website is for educational purposes only. Past performance does not guarantee future results. Option trading is inherently risky. Trade at your own peril. I/we do not give recommendations. Picks are only what I/we expect to trade given my/our own personal risk tolerances. Actual trades may differ should conditions suddenly and materially change.