Common Mistakes people make in Trading

[Egii Nna]

2. Emotional Decision-Making

Fear, greed, and euphoria are common emotions that can cloud judgment and lead to impulsive decisions. Traders often make mistakes when they're emotional, such as closing positions too early or holding onto losing trades.

Solution: Develop a trading plan and stick to it. Set clear goals, and avoid making decisions based on emotions.

I am more interested in these because if you cannot have a balance between your emotions and your decision, then you will have a good balance in your trading space, and this is one of the hardest acts to stay away from because if you can’t have that balance, you will never succeed or overcome your greed.
 
Because everyone is greedy, what just matters is knowing how to control your own greed, and that will never be achieved unless you have a strong balance between your decision and your emotions. With that, you will be able to stick to your plans, and it will be very hard for you to follow your emotions because there is balance, and if not, you will have to face the consequences of what you did.

[GreatArkansas]

(...)
5. Not Setting Stop-Losses

Stop-losses are essential risk management tools that help limit losses. Many traders fail to set stop-losses, exposing themselves to significant risk.

Solution: Set stop-losses for every trade to limit potential losses.

Among the list, this is what I find very important because as you can see this involves risk management. Where it is important thing that you will remain in the trading - the more capital you have, the longer you will stay, so it is always important to protect your capital.
Minimizing losses while maximizing the profits. Risk management is a must!

[Fivestar4everMVP]

Trading have different types. You can not be a swing trader and be expecting yourself to use stop loss. Stop loss is good for people that use high leverage. Short term traders are the ones that use high leverage. Stop loss is often used by short term traders. Long term traders may not use it at all.

People that chase loss will lose all.

agreed with this take, using SL for long term investment feels like purposefully trying to sabotage our own investment.
just recently I tried to catch the dip of ETH with SL and finding out the SL got triggered just to find out that the price actually sky rocket not long after.
it's overall a bad tool for the long term trader but really effective for high leverage future trading to limit loss based on breaking of resistance.
definitely a thing that any trader must know.

Well, as much as I understand what you mean, several other persons may not understand completely what you mean by the term "long term trader", I think using the term "low leverage trader" should have better been understood instead of using "long term trader", because ordinarily, this two terms doesn't mean the same thing.

A long term trader can use or not use stop loss, depending on the type of trading he or she is doing, while a low leverage trader may not have to use stop loss at all, because like you said, using stop loss as a low leverage trader will be the person destroying his or her own investment and opportunity to make profit.
I have experienced what you said on several scenarios and that have thought me never to use a stop loss when ever I set a low leverage between 1x and 2x, but anything as from 3x, should consider using a stop loss.

[justdimin]

Of course, as you have said, even traders who already have a lot of experience will never escape losses, or in that sense whoever you are, beginner or experienced, of course you will still experience losses, and it is also a fact that in Any activity that has the potential to be profitable will always have a negative side, such as the risk of loss. But perhaps the difference between beginners and professionals is in terms of losses, in the sense that beginners definitely experience more sessions that make them lose due to their knowledge being still very basic.

This means that skill and knowledge do not mean that they will always guarantee profits but are useful for increasing the opportunity for profit and minimizing the risk of loss, and if indeed skill or a lot of knowledge is a guarantee of always being able to make a profit and completely avoiding losses then surely the richest person in the world today is they are traders. Basically, the market will continue to run and create different prices. Simply put, as long as the market is running, of course the risk of loss will always be there.

I believe that even veterans may make some mistakes, but veterans do end up being a lot better most of the time as well, they do not end up with a loss, it should be pointed out that we are talking about something that takes some time, so it shouldn't really be a problem.

A veteran would rarely lose money, because they are a veteran or at least they should, because if they spent so much time learning and trading and still making a loss then there is something wrong with them. Majority of the veterans lose money very rarely, and while they do, newbies keep on losing money like crazy and that is something that we have to realize as a difference.

[Dewi Aries]

Of course, as you have said, even traders who already have a lot of experience will never escape losses, or in that sense whoever you are, beginner or experienced, of course you will still experience losses, and it is also a fact that in Any activity that has the potential to be profitable will always have a negative side, such as the risk of loss. But perhaps the difference between beginners and professionals is in terms of losses, in the sense that beginners definitely experience more sessions that make them lose due to their knowledge being still very basic.

This means that skill and knowledge do not mean that they will always guarantee profits but are useful for increasing the opportunity for profit and minimizing the risk of loss, and if indeed skill or a lot of knowledge is a guarantee of always being able to make a profit and completely avoiding losses then surely the richest person in the world today is they are traders. Basically, the market will continue to run and create different prices. Simply put, as long as the market is running, of course the risk of loss will always be there.

I believe that even veterans may make some mistakes, but veterans do end up being a lot better most of the time as well, they do not end up with a loss, it should be pointed out that we are talking about something that takes some time, so it shouldn't really be a problem.

A veteran would rarely lose money, because they are a veteran or at least they should, because if they spent so much time learning and trading and still making a loss then there is something wrong with them. Majority of the veterans lose money very rarely, and while they do, newbies keep on losing money like crazy and that is something that we have to realize as a difference.

Yes and indeed that is a fact, in the sense that even professionals or those who are experienced still experience losses in their trading activities and it is a normal thing to happen in an activity that cannot be predicted 100% accurately. This means that having more experience or flying hours does not mean that it will guarantee you to always make a profit in every trading session, but rather that it will make your trading skills much better in the sense that you will be able to avoid the possibility of too significant losses.

This doesn't mean "not at all" but rather "rarely experience losses", but on the other hand there are also some professionals who experience losses that exceed their profits, in terms of time yes they have more flying hours than beginners but the results are not much different. with beginners, that means, as you said, there is most likely something wrong here, in the sense that it is very likely that while they are going through the process they do not learn various things about the world of trading well so that the results are monotonous or there is no progress, and if we talk about the beginners, yes, I think experiencing losses more often than profits is normal, but over time they should get better.

[Zigabel]

Another thing you should know about gambling is in the fact that gambling can be very dynamic and it doesn't really get to follow a pattern in some cases, i understand that in trading, patterns are things most traders do look out for because most often, it does play out but importantly we should understand that it will not happen always. by all this I'm saying that all that you have said and stated are really okay and are really true but then exceptions do happen such that some may not keep to all of this rule and still trade well so its not a fixed thing, sometimes you even get to a point when you become very advanced trading, you may not want to abide by all of this because eat that pint you will be operating with a system that provides you with maximum efficiency.

[milewilda]

Of course, as you have said, even traders who already have a lot of experience will never escape losses, or in that sense whoever you are, beginner or experienced, of course you will still experience losses, and it is also a fact that in Any activity that has the potential to be profitable will always have a negative side, such as the risk of loss. But perhaps the difference between beginners and professionals is in terms of losses, in the sense that beginners definitely experience more sessions that make them lose due to their knowledge being still very basic.

This means that skill and knowledge do not mean that they will always guarantee profits but are useful for increasing the opportunity for profit and minimizing the risk of loss, and if indeed skill or a lot of knowledge is a guarantee of always being able to make a profit and completely avoiding losses then surely the richest person in the world today is they are traders. Basically, the market will continue to run and create different prices. Simply put, as long as the market is running, of course the risk of loss will always be there.

I believe that even veterans may make some mistakes, but veterans do end up being a lot better most of the time as well, they do not end up with a loss, it should be pointed out that we are talking about something that takes some time, so it shouldn't really be a problem.

A veteran would rarely lose money, because they are a veteran or at least they should, because if they spent so much time learning and trading and still making a loss then there is something wrong with them. Majority of the veterans lose money very rarely, and while they do, newbies keep on losing money like crazy and that is something that we have to realize as a difference.

When it comes to mistakes then there's no such thing about being expert or simply its an inevitable stuff on which you wouldnt really be able to avoid because this market is really that volatile and something that cant be predicted. You shouldnt really be that making yourself being that perfectionist because on the moment that you would really be pushing yourself into your limits then you would really be having that kind of behavior on which you would really be ending up on being desperate on which this isnt something good when you do deal up with trading. This is why it would really be that important that whenever you do experience loses or mistakes then theb est thing to be done is to make yourself that learn with those mistakes. Mistakes do really give out that kind of learning and on the moment that you do gain up more experience then this is where
you do gradually make yourself being called as a professional when time comes.

It would never been ideal nor really that recommended on trying out to chase up losses. This is where it would really be testing out your patience and your emotion
on which this market will really be that like a roller coaster. So adjustments will really be crucial anytime.

[Yamifoud]

It has been said that all of them are common mistakes, and they still exist no matter how often a trader falls into any of them. No matter how we try to avoid them, as human beings who are born with emotions and weaknesses, we can't fully avoid them. It is a fact to accept that mistakes are usual, but we don't have to think this is a reason for our failure. We can be better traders even if we commit mistakes if we know how to accept them and minimize losses. Handling emotions is not easy, which is why achieving success is not easy either.

[jaberwock]

I am more interested in these because if you cannot have a balance between your emotions and your decision, then you will have a good balance in your trading space, and this is one of the hardest acts to stay away from because if you can’t have that balance, you will never succeed or overcome your greed.
 
Because everyone is greedy, what just matters is knowing how to control your own greed, and that will never be achieved unless you have a strong balance between your decision and your emotions. With that, you will be able to stick to your plans, and it will be very hard for you to follow your emotions because there is balance, and if not, you will have to face the consequences of what you did.

Both are related, hell they are both included there. Our decision-making will depend on our emotions, so if we have a good or stable emotion, we can expect that our decisions will also be right and can ensure to give us a good outcome. It can help us to decide easily, which is great so that we can have a less stress in mind and then we can move on to other things that we are planning to do immediately. Once we already master the pointers given by the OP, why will we ever plan to abandon even a few of them? I think no one wants to have a poor performance in trading. If in case we are planning to lay low, or quit trading permanently, then we will also leave all of them, not just a few.

[$weetne$$]

Another thing you should know about gambling is in the fact that gambling can be very dynamic and it doesn't really get to follow a pattern in some cases, i understand that in trading, patterns are things most traders do look out for because most often, it does play out but importantly we should understand that it will not happen always. by all this I'm saying that all that you have said and stated are really okay and are really true but then exceptions do happen such that some may not keep to all of this rule and still trade well so its not a fixed thing,

There are other factors that can affect the results of a trade and what you thought was going to happen by your predictions will be different because the events happening when you are trading is not the same event that happen previously when the strategy that you are using was developed. We have to keep an open mind when trading and be willing to accept the outcome of our predictions. If things go as we predicted then we should be happy but when a different result is gotten, we should go back and look at our strategy to see if we made a mistake and when there are no mistake then we should just accept it as it is because as traders we can not make profits from all our trades as there are some trades that we are just going to lose regardless of how good we are becoming as a trader.

[Lanatsa]

3. Impulsive Behavior

One of the most common mistake on the time that you do make up tradings is on the moment that you will be finding yourself that being too emotional on what are the
decisions that you are making specially on the time or moment that you do find yourself having those loses on which these are the common times on where traders becomes
that too emotional and on the moment that those impulsive behavior spikes in then this is where desperation and careless actions would really be taken.

We are just humans and its normal that we would really be having that kind of impulsive feeling but on the moment that you do let your emotions control your mind
and decision making then this is where shit things happen. Anything could turn out to be disaster on the time that you cant think up well or cant be able to assess
the situation on which despite on minding about back up plans, you would really be rather doing actions on which arent supposed to be done.

[Yukyzu]

Another thing you should know about gambling is in the fact that gambling can be very dynamic and it doesn't really get to follow a pattern in some cases, i understand that in trading, patterns are things most traders do look out for because most often, it does play out but importantly we should understand that it will not happen always. by all this I'm saying that all that you have said and stated are really okay and are really true but then exceptions do happen such that some may not keep to all of this rule and still trade well so its not a fixed thing,

There are other factors that can affect the results of a trade and what you thought was going to happen by your predictions will be different because the events happening when you are trading is not the same event that happen previously when the strategy that you are using was developed. We have to keep an open mind when trading and be willing to accept the outcome of our predictions. If things go as we predicted then we should be happy but when a different result is gotten, we should go back and look at our strategy to see if we made a mistake and when there are no mistake then we should just accept it as it is because as traders we can not make profits from all our trades as there are some trades that we are just going to lose regardless of how good we are becoming as a trader.

When executing a trade, of course, it will be very different from what we have planned well, I think when planning a trade, we also need to prepare ourselves so that we can solve the problems that occur when executing trades, yes, of course everyone will feel happy when they succeed in the trades that are carried out and I agree with you when we experience failure in trading, we must be able to re-evaluate what we have done and If there is indeed a mistake that we make, of course we must be able to correct it and do not let us repeat the same mistake again in the next trade.

[KeenanEl19]

3. Impulsive Behavior

One of the most common mistake on the time that you do make up tradings is on the moment that you will be finding yourself that being too emotional on what are the
decisions that you are making specially on the time or moment that you do find yourself having those loses on which these are the common times on where traders becomes
that too emotional and on the moment that those impulsive behavior spikes in then this is where desperation and careless actions would really be taken.

We are just humans and its normal that we would really be having that kind of impulsive feeling but on the moment that you do let your emotions control your mind
and decision making then this is where shit things happen. Anything could turn out to be disaster on the time that you cant think up well or cant be able to assess
the situation on which despite on minding about back up plans, you would really be rather doing actions on which arent supposed to be done.

That's right, I thought of that and I think it makes sense too. In addition, there is also something else that is almost the same as what you said, namely the absence of good judgment. Because indeed, when we feel emotional or are in an unstable emotional state, of course we will usually make decisions that are not carefully considered because of the overflowing emotions that make the decisions made tend to be rushed. This can actually be prevented as long as we can know when to stop. Unfortunately, emotions must be owned by everyone and tend not to be able to hold it.

We must try as much as possible to be able to control our emotions so that our thoughts remain clear and can consider the decisions to be made. Don't follow your emotions, because that can make everything go wrong like you said with the bad things that will happen, and I think that's for sure. Having a backup plan doesn't mean that we can do things beforehand casually or recklessly, of course there must be precautions and always be careful in making decisions.

[CageMabok]

It has been said that all of them are common mistakes, and they still exist no matter how often a trader falls into any of them. No matter how we try to avoid them, as human beings who are born with emotions and weaknesses, we can't fully avoid them. It is a fact to accept that mistakes are usual, but we don't have to think this is a reason for our failure. We can be better traders even if we commit mistakes if we know how to accept them and minimize losses. Handling emotions is not easy, which is why achieving success is not easy either.

What you say is actually quite clear that every person can actually be successful even though they have made mistakes and experienced failure. Because success can come to everyone who never gives up and is always active in doing whatever they like and can bring in profits such as in trading and others. But on the one hand, there are also people who will not achieve any success in their life even though that person never creates excessive emotions in their life, that person is a lazy person.

So I think we all shouldn't be lazy at work even though we have failed due to mistakes or other things, because we need to keep moving by controlling our emotions and increasing our knowledge and skills in the field we are currently working on so that one day we can achieve success. Even though when we imagine this process it is not easy, all of these things will feel comfortable if we are willing to go through them slowly without stopping, because in every thing there must always be a high level of consistency.

[Peanutswar]

(...)
5. Not Setting Stop-Losses

Stop-losses are essential risk management tools that help limit losses. Many traders fail to set stop-losses, exposing themselves to significant risk.

Solution: Set stop-losses for every trade to limit potential losses.

Among the list, this is what I find very important because as you can see this involves risk management. Where it is important thing that you will remain in the trading - the more capital you have, the longer you will stay, so it is always important to protect your capital.
Minimizing losses while maximizing the profits. Risk management is a must!

Traders have too much confidence in their trades even though they already set a stop loss and take profit with their trading chart because their emotions rise up and also the adrenaline to bring back their losses or gains sometimes they hold too much time instead of cutting their trades. Ideally is to take profit immediately and make another position at the end of the day we are counting the winning trades but not the wins in just a single trade. I prefer to stick with the trades plan and execute, cut the loss, and move on to the next trade.

[TheUltraElite]

Behavioral control is very important in trading. Reacting to a big change is a common man's way of approaching the market. The wise trader does not react but seeing how they can use it to their advantage. You will see people will start coming to this forum when bitcoin rushes into another bull market and they will all start buying crypto. This is the wrong move and this same flock will cry once the price naturally starts dropping.

I think everyone should have their own dummy trading course done either on paper or on an spreadsheet to gauge how much emotionally charged they become when the market turns upside down.

[Adams0001]

Committing mistakes gives us a reason to improve and we believe that every single mistake is an opportunity to learn new things. But of course, I don't say we need to do this (mistake) for that sake when we know there is a chance. In fact, we know already these things, and a chance for newcomers to avoid them but why does still exist?

Well, there are somewhat called decision-making differences, and even old traders give some hints and warnings yet, our minds can be changed in the actual scenario. Most of the time we think it is okay but it is wrong, and we just realized it was when a mistake is made.

You are correct; mistakes are part of learning. Everyone makes mistakes in everything. And by making mistakes, you will undoubtedly learn from them and improve yourself.Anyone makes mistakes in trading because no one will say he never loses, and the market will never smile for you. What I've noticed in trading is that people lose a lot because they chase their losses, saying they need to get their capital back, and they don't have time to calm down and read the market very well before they stake another one, which is why it's so important to be disciplined in everything you do. Op, if someone learns everything you write, I am confident that person will succeed in trading. Because trading requires focus, you must devote a significant amount of time to it in order to gain all of the necessary experience. This is why you must be patient with everything you do. I'm trading, but I'm far from perfect. I'm still learning from my mentors in the hopes that one day I'll be as perfect as them.

[beerlover]

as much as I understand what you mean, several other persons may not understand completely what you mean by the term "long term trader", I think using the term "low leverage trader" should have better been understood instead of using "long term trader", because ordinarily, this two terms doesn't mean the same thing.

A long term trader can use or not use stop loss, depending on the type of trading he or she is doing, while a low leverage trader may not have to use stop loss at all, because like you said, using stop loss as a low leverage trader will be the person destroying his or her own investment and opportunity to make profit.
I have experienced what you said on several scenarios and that have thought me never to use a stop loss when ever I set a low leverage between 1x and 2x, but anything as from 3x, should consider using a stop loss.

I would guess that, there are some different sort of traders, and that is the difference. Some people might buy and try to sell within a few minutes, some people may buy and want to sell that same day, some people may want to buy and sell within a week of it, and some may buy and sell three months later. All of these are traders, just because you hold it for three months doesn't make you a long term holder, those are people who hold for years. This is why I think it's quite important to realize that we are going to deal with something that is different among the traders.

Stop loss used for short term traders that deal within a single day, and long term trader that deals within a month, may not be the same. Long term has a higher chance to keep it holding for a while longer, and I think short term one will not want that, and want a quick profit and if not get out, which is understandable thinking about the situation as well. This is why it's quite important to know what you are doing, sometimes it is not an easy thing to handle, and sometimes it's quite easy to do it all. We should consider how mistakes could even be different among each type of trader, and not the same among all of them.

[noormcs5]

(...)
5. Not Setting Stop-Losses

Stop-losses are essential risk management tools that help limit losses. Many traders fail to set stop-losses, exposing themselves to significant risk.

Solution: Set stop-losses for every trade to limit potential losses.

Among the list, this is what I find very important because as you can see this involves risk management. Where it is important thing that you will remain in the trading - the more capital you have, the longer you will stay, so it is always important to protect your capital.
Minimizing losses while maximizing the profits. Risk management is a must!

Stop losses are indeed very important in gambling but most gamblers ignore it. That does not mean that they don't know about stop losses but they do not put stop losses because they do not want to end their trade even in a minor loss. They always want to end the trade in profit and it is not possible.

I have seen people in the loss of more than 60-70% of their trade because they did not put stop loss. If they had put a stop loss in their trades, they may ended in a 1, 2 or 5% loss, depending upon their trading strategy and would have traded again and recover the loss. Now without stop loss,  they keep on holding the assets for long term in spot trade and may get liquated in case they are in future trade.

[knowngunman]

This is mostly for newbies and people interested in trading

This is beneficial for all, every trading knowledge is useful not only for the newbies but for even the professional.

6. Overtrading

Trading too frequently can lead to increased commissions, losses, and mental fatigue.
(There’s a reason for the time indicator).

Solution: Set a trading schedule and stick to it. Avoid overtrading and focus on quality trades.

This is a serious area that every trader needs to concentrate on. In as much as setting schedules is very necessary to have a balance trade and rest, it's more important to keep to the schedule.. Many traders have this schedule but can not work with it. Emotion is the primary cause of this and without learning how to minimize your emotion, it will be hard to stick to the schedule you set.

By the way, not trading often does not guarantee success. It all depends on how you manage your trade. Irrespective of whether one is making profit or not, overyrading has to be managed.