Online trading attracts people with the possibility of good profit and freedom. But this freedom is relevant and has many downsides
The positive aspect is that there is no one to tell you what and how to do – you can develop your own strategy, choose the asset you like, and trade when you are in a good mood to do it. But traders often develop bad habits that can be difficult to give up.
Moreover, many traders are not even aware of how these habits can affect their trading. So what are the most harmful patterns that nullify your chances for success?
- Inability to define your goal
If you want to literally earn a lot of money, such a motto is unlikely to work. You must clearly know what you need money for, how much you are ready to invest and earn, and what losses you can sustain.
You need to love trading and have special qualities for it. Understanding yourself and your goals is the only way to long-term and successful trading.
- Random trading
Trading without a system is full of uncertainty and anxiety. You are overwhelmed with information but cannot use it efficiently.
A typical mistake of such trading is to open a position without knowing when to close it. Trading without a system is the most common mistake of beginners. You risk facing impressive losses if you do not stop in time.
Do not get upset if you fail to develop your own trading system – you can always use a ready-made one. When you enhance your skills, you can start creating your trading system.
- Lack of a money management system
Without due control, your account will be empty sooner or later. Before opening a position, you should know how it will affect your balance if you lose. The habit of doing this before opening a position can save you from unprofitable deals.
Soon, you will learn to do it automatically. Therefore, try to control your account before and after the trade, repeat these actions day after day, and you will soon successfully develop one of the best trading habits.
- Absence of a stop order
It is an almost obligatory condition to open a position thinking about the exit point. If you ignore this rule, your account can be completely ruined.
Trading without stops is like careless driving a car without brakes. Stop order limits your losses and protects your capital. And this method is the best ever invented in online trading.
- Trading around the clock
You cannot spend all your time on trading. It is very addictive at the beginning, but it may become a habit. Some newcomers fanatically follow the market day and night, creating an enormous load.
Trading without interruption will exhaust you, and sooner or later, it will start to bring losses. You still have to choose a specific market to work with.
- Trading in stressful periods
Your logic does not work properly when serious changes take place in life. You become more vulnerable and inadequate.
You do not have to make decisions in stressful situations as you can miss important things and make a serious mistake. Such actions can lead to a loss of capital.
- Too much confidence
Experts say that 90% of traders make the same mistake. Too much confidence in your trading skills can be fatal in the long run. A trader must continuously study.
You can always learn something new about trading in the market, even if you are currently trading successfully. It is crucial to be open to new ideas and honestly admit and analyze your mistakes.
- Uncontrolled emotions
It is essential to understand your emotions while trading. Getting rid of bad habits is often accompanied by strong disappointment, anger, and impatience.
You should never let greed or fear guide you. Always remember that you should trade the amount that you can afford to lose.
The only way to break your bad habits is to be honest with yourself. Do not be ashamed to admit your mistakes and work on them. You will need a lot of patience and hard work to overcome bad habits. First of all, you should analyze your emotions and maintain a positive attitude. Allow yourself enough time to cope with this problem and even be ready to fail. Find a healthy balance between trading and personal life. It will be good to develop an action plan for your trading routine and set a trial period to see what and how fast you can change. Always remember the words of Warren Buffett – “Successful investing takes time, discipline and patience.”