I asked 50,000 traders what their biggest trading mistake is. Here...
Rohan Das@rohaninvestor
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Mar 31, 2024
~2 min read
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I asked 50,000 traders what their biggest trading mistake is.
Here are the 6 most common replies:
Here are the 6 most common replies:
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(1) Not having a trading plan
Just one page can be your game-changer:
• WHY you trade
• WHEN you trade
• WHAT you trade
• Goals for year/month
• Strategy to get there
• Emotion-free exits
Just one page can be your game-changer:
• WHY you trade
• WHEN you trade
• WHAT you trade
• Goals for year/month
• Strategy to get there
• Emotion-free exits
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(2) Not understanding and not implementing Risk Management
Only 5-10% of traders profit due to poor Risk strategies.
Decide how much you're willing to lose on a trade.
Eg: If your risk is 1%, with 5 trades, exposure is 5%.
Remember, 1 losing trade can end your career. Risk 1-2% per trade!
Only 5-10% of traders profit due to poor Risk strategies.
Decide how much you're willing to lose on a trade.
Eg: If your risk is 1%, with 5 trades, exposure is 5%.
Remember, 1 losing trade can end your career. Risk 1-2% per trade!
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(3) Not having a clearly defined trading strategy
Define clear rules for:
1. Entry points
2. Exit points
3. Stop-loss placement
4. Capital allocation
5. Know when to stay out
Write them down for consistency and improvement.
Define clear rules for:
1. Entry points
2. Exit points
3. Stop-loss placement
4. Capital allocation
5. Know when to stay out
Write them down for consistency and improvement.
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(4) Not following your own clearly defined trading strategies
• Trust your plan: Stick to your strategy! Too much info can lead to doubt and deviation.
• Ignore the noise: Stop listening to others; focus on your analysis.
• DIY Success: Don't blindly follow tips or trades. Learn from others, but build your consistency.
• Risk Awareness: Every trader is unique. Rely on your knowledge, not someone else's.
• Trust your plan: Stick to your strategy! Too much info can lead to doubt and deviation.
• Ignore the noise: Stop listening to others; focus on your analysis.
• DIY Success: Don't blindly follow tips or trades. Learn from others, but build your consistency.
• Risk Awareness: Every trader is unique. Rely on your knowledge, not someone else's.
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(5) Making decisions based on emotions (not according to the strategy or plan)
Stick to your plan to avoid common pitfalls:
• Taking wrong trades
• Missing good trades
• Poor entry timing
• Over/under risking
• Failing to exit as per plan
• Cutting profits too soon and letting losses grow is common.
Follow the 2 Golden Rules:
• Cut losses short
• Let profits run
Stick to your plan to avoid common pitfalls:
• Taking wrong trades
• Missing good trades
• Poor entry timing
• Over/under risking
• Failing to exit as per plan
• Cutting profits too soon and letting losses grow is common.
Follow the 2 Golden Rules:
• Cut losses short
• Let profits run
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(6) Not having a clear understanding of technical analysis
• Learn basics: Start with simple concepts such as support & resistance lines.
• Advanced techniques: Move on to MA, MACD, and RS tools.
• Timing is everything: Decide when to enter or exit a trade.
• Keep it simple: Stick to one or two indicators, and focus more on price action over tools.
• Learn basics: Start with simple concepts such as support & resistance lines.
• Advanced techniques: Move on to MA, MACD, and RS tools.
• Timing is everything: Decide when to enter or exit a trade.
• Keep it simple: Stick to one or two indicators, and focus more on price action over tools.
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Thread #123 - That's a wrap!
If you found this useful:
(1) Follow me @rohaninvestor for more such threads. I write a new thread every week simplifying trading/investing concepts.
(2) Bookmark this thread for future.
If you found this useful:
(1) Follow me @rohaninvestor for more such threads. I write a new thread every week simplifying trading/investing concepts.
(2) Bookmark this thread for future.