My Mistakes While Trading
Is it important to have a strategy when trading or is it enough alone?
When we decide to become a day trader, we all start studying fundamental analysis and technical analysis. Of course, this is very important when creating a strategy for ourselves. So, is strategy alone enough? No way. It means nothing unless we learn to control our emotions.
Let’s see what mistakes we encounter when we fail to control our emotions.
Greed
Wanting to earn more by opening large lot trading. After making a successful trade, people starts to think: ‘I opened a trade of 1 lot and got $250. If only I had opened a trade of 10 lots, I would have gotten $2500.’ This way, it doesn’t take long for things to start getting worse. Why? Because people only think about the money they will receive and do not calculate the money they risk. The money he will lose increases 10 times more, and after a few stop trading, he puts his account in a difficult situation and even begins to feel much worse psychologically. If you are in a bad psychological state, there is no doubt that the trading will also fail.
Changing the location of profit taking causes another failure caused by greed. For example, when you enter a trade, you set a target of $ 500 for yourself, and the trade you enter starts to work in your favor, as a result, the market approaches your profit price. At this point, you gain self-confidence and move your profit taking level further. So why does this self-confidence arise at that moment? Because when a person makes a successful entry, he thinks that he controls the market. Yes, you changed the price, the market comes to the price you first wanted and even moves a little further, but somewhere in between it reverses and moves towards your entry level. As a result, the person leaves a random place or breaks-even or gets angry and starts holding the process longer and stops.
Trading in Different Markets
Every market has its own character. Some are low volume and very fast acting like NQ, some are large volume and slow moving like ZN. The fast market starts to move before you even decide what to do, while the slow market takes a long time to reach the place you set as the entry point, and this negatively affects your patience.
It is much more efficient to focus on one market in each session, especially at the beginning when we decide to make money as a trader. As your experience increases, you can identify new markets for yourself.
Staying in front of the screen for too long
Staying in front of the screen for a long time causes people to get tired, and when trading, they open trade under the influence of emotions rather than consciously.
The internet is of great importance today, it is even an excellent medium to learn something, but it is also a waste of information. Watching and reading too many videos before trading affects you negatively rather than positively. Especially consuming negative content.
Now let’s consider a market that is always open. Let’s say you have time to trade in two different sessions. You opened it in the European session and traded the same market until the American session ended, the result is negative in terms of making money. The behavior of the markets varies according to the sessions, and each market is much more productive in its main trading sessions. You can take the following precautions for this situation: In the European session, you can trade by choosing a market from the British or German stock exchanges, and in the American session, you can trade by choosing a market from the American stock exchanges. These choices depend on your situation. I prefer FGBL in the European session, and ES and UB in the American session.
Being a Coward (Failing to Stop)
This is which I lose the most money.
When entering a trading, it is necessary to stick to the amount you have determined and even sacrifice it. Thinking that you have lost before you even enter the transaction makes you act more easily. So what am I doing? Before entering the trade, I set the risk as $250 and enter the trade. The market starts to move against me and starts to write off a loss of $100 and I have panic and close the trade. Afterwards, the market turns before reaching my stop price and reaches the price I set as take profit. In such a case, I don’t only pay $100 out of my pocket, but also give up the profit I would have received, and as if that were not enough, I get angry at this situation and open trades wherever possible, you can guess the result.
Trying to Achieve Big Reversals
Fear of Missing Out (FOMO)
Wanting to Earn Money Immediately and Getting Rich
The mistakes I mentioned above and which I make a lot of, all stem from lack of discipline. Being a Daytrader requires having strategy and discipline.
RISK WARNING
Futures and forex trading involve significant risks and are not suitable for every investor. An investor could potentially lose all or more of his or her initial investment. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading, and only those with sufficient risk capital should consider trading. You should be aware of all the risks involved in trading and seek advice from an independent financial advisor if you are in any doubt. Past performance is not necessarily indicative of future results.
