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Trust is Earned: My Journey Toward Becoming a Responsible VendorIntroduction: Learning from Setbacks (and Sharing for Others on the Same Journey) Everyone makes mistakes, and I have certainly made my fair share. I want to share my personal journey of learning from my past missteps on TradingView, my efforts to deeply understand the platform's guidelines, and my aspiration to become a responsible vendor, in the hope that others on the same journey can learn from it. This story is about the importance of compliance, transparency, and what it means to genuinely add value to a community of traders.  Disclaimer: I am a provider of technical indicators (all free at this point, but some will be paid in the future), This article is purely for informational & educational purposes for the greater community. Mistakes and Realizations I won’t shy away from admitting that I've faced temporary bans on TradingView. At first, I saw these bans as setbacks that were challenging and frustrating. But over time, I realized they were valuable opportunities to understand what it really means to contribute responsibly to this incredible platform. Those experiences prompted me to reflect on my actions and invest time in learning the rules that govern this community— not just to avoid future bans, but to truly align with the values of TradingView. Areas of Growth and Mastery To ensure my growth as both a script publisher and a prospective vendor, I focused on mastering three key areas that are critical for contributing meaningfully to TradingView: Clear Communication and Respect for Moderators: One of the first things I learned was the importance of making my content clear and accessible to all traders. While I have always strived for originality and avoided plagiarism, I realized that clarity is just as crucial. Ensuring that my work is understandable helps others fully appreciate and benefit from the ideas I share. Additionally, I learned to respect and comply with moderator feedback, which has been instrumental in improving my content. Creating Impactful and Original Contributions: I have always aimed to provide original and valuable content, but through my journey, I further educated myself on how to better meet community needs. Rather than simply reiterating existing ideas, it's essential to focus on creating content that directly helps traders understand or solve a specific issue. Ensuring that descriptions are clear and straightforward, offering immediate insights that traders can act upon, is critical to creating impactful content. Charts should be presented in a clean and informative manner, without making unrealistic claims about performance. Run away if someone promises to turn $500 into 5k overnight.  Building Trust Through Ethical and Transparent Practices: Unfortunately, there are many scammers out there, and many traders fall into traps buying so-called 'holy grail' tools that promise unrealistic returns. It's crucial to be aware of these pitfalls and ensure transparency and ethical practices are at the forefront. Although I’m not yet a vendor, I aspire to be one. This means understanding the expectations for providing quality tools and services. Honesty and ethical business practices are fundamental—it's not about making sales, but about building trust with the community. Being transparent and ensuring the tools are genuinely helpful to traders and investors without overpromising results goes a long way in building trust. Although I’m not yet a vendor, I aspire to be one. This means understanding the expectations for providing quality tools and services. Honesty and ethical business practices are fundamental—it's not about making sales, but about building trust with the community. Being transparent and ensuring the tools are genuinely helpful to traders and investors without overpromising results goes a long way in building trust. It is essential for every indicator and strategy, whether paid or free, to provide real value to traders and investors. ❖ Adding Value: Insights from Community Feedback Through my journey, I also received feedback from moderators, which helped me understand how to align my contributions better with the expectations of TradingView. One key takeaway was that adding value to traders must be actionable, realistic, and grounded in the community's needs. It’s not enough to simply share insights or predictions; it’s about helping others make informed decisions, understanding the risks involved, and learning together. It is crucial to emphasize honesty, respect for users, and the importance of providing value before expecting anything in return. This principle must become a core part of how contributions should be approached. Many of my scripts are available for free, and seeing traders use them and benefit from them has been incredibly rewarding. ✹ My Aspiration to Become a Responsible Vendor Every vendor's goal must be to genuinely support traders by improving their strategies and decision-making through transparency, ethical practices, and adherence to guidelines. Building trust takes time, and I strive to align my offerings with TradingView's core values: respect for traders, adding true value, and fostering collaboration. My current focus is on refining my skills, publishing original content, and ensuring that every tool I create serves an educational purpose, genuinely helping traders navigate market complexities. Conclusion: Earning Trust, One Step at a Time The journey to becoming a responsible vendor is about more than just meeting requirements—it's about contributing to a community in a way that is genuine, transparent, and respectful. I am committed to continuing this journey, learning from past mistakes, and striving to add value every step of the way. Trust is earned, not given, and I’m ready to keep earning it.
INDEX:BTCUSDEducation
by fract
6
Learning from Warren Buffett's 7 Major Investment ErrorsWarren Buffett's name resonates with success, particularly through investments in renowned companies such as Coca-Cola, American Express, Apple, Bank of America, Moody’s, Kraft Heinz, and more. He stands as a global icon, amassing a wealth exceeding USD 100 billion. Beyond his investment prowess, Buffett generously imparts his wisdom to millions worldwide. Among his many famous quotes, one emphasizes the importance of learning from others' mistakes. Warren Buffett's 7 Major Investment Errors I) Dexter Shoe Company - In 1993, Warren Buffet's Berkshire Hathaway acquired Dexter Shoe Company, a decision he later regretted as his worst deal. Buffet made multiple significant mistakes in this acquisition. - The first error was misjudging Dexter's potential. Berkshire bought Dexter due to its high return on capital employed but failed to consider the competitive threat posed by cheap shoes from countries like China. Buffet acknowledged this oversight in 1999, highlighting the increasing challenge for domestic producers in the face of a market flooded with 93% of 1.3 billion pairs of shoes purchased in the United States coming from abroad. - The primary lesson here is the necessity of assessing a company's durable competitive advantage before investing. Durable competitiveness has transitioned from a good-to-have factor to a must-have for any business. - Buffet's second mistake was financing the Dexter Shoe Company purchase with Berkshire Hathaway stock valued at 433 million dollars, rather than using cash. A single share of Berkshire's Class A stock was approximately USD 15,000 in 1993. Today, it is valued at USD 517,000. - This decision didn't just cost Berkshire shareholders USD 433 million for a company that eventually became worthless; it resulted in a staggering loss of 15 billion dollars for Berkshire's shareholders. - The crucial lesson derived from this experience is never to sacrifice successful investments to make risky bets. II) Tesco - Tesco, a British grocery chain, became a concern for Berkshire Hathaway when the company's ownership stake exceeded 5% by 2012. By 2013, signs of trouble at Tesco became evident, leading Berkshire to reduce its stake to 3.7%, amounting to an investment of nearly 1.7 billion dollars. - In the subsequent months, Tesco's stock plummeted by nearly 50% due to declining sales, heightened competition from discount retailers, and an accounting scandal that attracted scrutiny from the UK's financial regulators. - Buffett's mistake lay in hesitating to sell Tesco stocks despite recognizing these troubling signs. This delay resulted in a loss of approximately USD 444 million for Berkshire. - The crucial lesson from this situation is the importance of conviction when making selling decisions. Just as one should invest with conviction, it is equally vital not to hold onto a stock if confidence in its performance wavers . III) Energy Future Holdings - Warren Buffett, known for seeking advice from Charlie Munger in his investment decisions, openly admitted a significant mistake in his 2013 letter. He invested USD 2.1 billion in bonds of Energy Future Holdings Corporation, banking on rising natural gas prices to boost the competitiveness of the coal-based business and yield profits. - Unfortunately, natural gas prices plummeted from their 2007 levels, leading to substantial losses for Energy Future Holdings. The company declared bankruptcy in 2014, and Berkshire Hathaway sold the bonds at a loss of USD 873 million in 2013. - Buffett acknowledged his error in assessing the transaction's gain-loss probabilities, emphasizing the importance of seeking a second opinion from trusted advisors or partners when making significant decisions. - This incident highlights two essential lessons. Firstly, it underscores the risks associated with predicting market trends, whether in natural gas, oil, gold, or individual stocks. Secondly, it emphasizes the perilous nature of investing in high-yield "junk" bonds. While conglomerates like Berkshire Hathaway can absorb losses from such high-risk endeavors, retail investors face financial disaster in the event of a default. Hence, it is crucial to avoid instruments with questionable return on capital, especially in a retail investor's context. IV) Lubrizol & David Sokol In 2011, Warren Buffett and Berkshire Hathaway faced severe scrutiny. - David Sokol, chairman of several Berkshire subsidiaries, recommended Lubrizol Corporation as a potential acquisition to Buffett while he himself owned stocks in the company. Sokol's failure to disclose his stock ownership violated Berkshire's insider trading rules. Despite this, Berkshire acquired Lubrizol for approximately USD 9 billion, and Sokol profited around USD 3 million from the transaction. - Upon investigation, it became clear that Sokol had been ambiguous about how he acquired Lubrizol stock, neglecting to mention that he purchased shares after meeting with the bankers proposing the acquisition. Buffett emphasized the issue as a matter of ethics, although he initially acknowledged that no one was at fault. - This situation highlighted the importance of not being excessively trusting in the business world. The lesson here is to maintain a checklist, follow a rigorous process, and be unafraid to ask numerous questions, especially when your reputation is at stake. Taking extra precautions becomes essential in preserving one's integrity and credibility. V) Amazon - Up until now, the mistakes we've discussed were all instances of active decisions leading to losses. However, there's a different kind of mistake made by Buffett that falls more under the category of missed opportunities. - In 2017, Buffett openly admitted that he had been observing Amazon.com for an extended period but never invested in it. In his own words, he confessed, “I was too dumb to realize. I did not think Jeff Bezos could succeed on the scale he has.” - Buffett had underestimated Amazon's brilliance in two key areas: its dominance in e-commerce and its success in cloud services through Amazon Web Services. - Buffett's traditional approach didn't align with investing in stocks with high price-earning ratios like Amazon's in 2019. Moreover, he tended to overlook technology companies, considering them beyond his expertise. - In this context, the significant cost of this missed opportunity becomes apparent. It underscores the necessity of having a well-defined area of expertise. However, it's even more crucial to continuously expand and evolve that expertise over time to seize valuable opportunities. VI) Google - The Berkshire Hathaway portfolio notably lacks any shares from Alphabet or Google, a fact that Warren Buffett deeply laments. - Google initially piqued Buffett's interest due to a Berkshire-owned subsidiary, GEICO, operating in the auto insurance sector. GEICO heavily depends on Google's advertising platform to attract customers. - Buffett acknowledges that he should have delved deeper into Google's business and long-term prospects. His limited technical understanding might have played a role in missing this opportunity, despite it being right within his immediate purview. VII) Berkshire Hathaway - It might surprise you, but Warren Buffett's most significant investment blunder occurred when he bought Berkshire Hathaway in 1962. Back then, Berkshire Hathaway was a struggling textile business, meeting the criteria of Benjamin Graham's cigar-butt investing model. - Buffett became intrigued by the favorable financial assessment and started purchasing the stock in installments. In 1964, the company's owner, Seabury Stanton, proposed buying Buffett's shares at $11.50 per share. However, the actual offer received was $11.32, which angered Buffett. In retaliation, he acquired a controlling stake in Berkshire Hathaway and ousted Stanton from the company. - Despite taking revenge, Buffett found himself stuck with a significant investment in a failing business. To this day, he considers it his most regrettable investment. He endured the burden of this failing textile business for an additional 20 years. Buffett admits that had he redirected the cashflows into other ventures like insurance companies, Berkshire would have been worth twice as much as it is now. - By his estimations, Buffett's decision to invest in Berkshire Hathaway amounted to a $200 billion mistake. The lesson here is clear: emotional decisions have no place in successful investing. Thank you @Money_Dictators
TVC:DJI
by Money_Dictators
32
Common trading mistakes to avoid as a trader ❌ For new market traders, review these common trading mistakes so you can avoid emotional blunders with your investments and take advantage of psychological edges. The mechanics of trading are relatively simple. A click or two gets you into a trade, and a click or two gets you out. But the decision-making process behind those clicks is much more complex. And with complexity comes more opportunities to make mistakes that can affect your bottom line. Here are seven common mistakes that traders—both new and experienced—sometimes make. 1️⃣Mistake 1: Emotional trading/psychological trading Trading can bring out the best and the worst in us. For a trader, nothing is more frustrating than opening a long position and seeing the market drop, bringing the value of your long position to levels well below the price you bought it. The same can be said about missing out on a move in a stock that's been on your radar for a while. Anger, fear, and anxiety can lead traders to make quick and even irrational emotion-based decisions. The reality is that markets are cyclical, moving through ups and downs. Trading decisions based on emotions may not always give the results you want. Instead, take a step back and think through the situation logically. Every situation is different, and instead of buying or selling in a panic, think about how you can best manage risk. 2️⃣Mistake 2: Pulling stop orders When a position hits a stop order, it can often mean you're going to take a loss on it. Pulling—or canceling—a stop is often a subliminal attempt to avoid admitting you were wrong. After all, as long as the position is open, there's still a chance it could come back and be profitable. The problem is every 50% loss starts with a 5% loss. It's not magic; it's just math. And it only takes one small loss that turns into a big one to make a big dent in a portfolio. Losing is no fun, but it's part of trading. Being disciplined about managing stop orders may help you come back and trade another day. 3️⃣Mistake 3: Trading without a plan Trading plans should act as a blueprint during your time on the markets. They should contain a strategy, time commitments and the amount of capital that you are willing to invest. After a bad day on the markets, traders could be tempted to scrap their plan. This is a mistake, because a trading plan should be the foundation for any new position. A bad trading day doesn’t mean that a plan is flawed, it simply means that the markets weren’t moving in the anticipated direction during that particular time period. Every trader makes mistakes, and the examples covered in this article don’t need to be the end of your trading. However, they should be taken as opportunities to learn what works and what doesn’t work for you. The main points to remember are that you should make a trading plan based on your own analysis, and stick to it to prevent emotions from clouding your decision-making. Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
6
Top Mistakes to Avoid After a Losing TradeI hope you already know that losing trades are inevitable in trading. No matter how professional a trader is, mistakes are made. It's part of the game, and the possibility of making mistakes should simply be factored into your trading strategy. But what really matters for success in the market is how you handle the fact of incurring losses. Today, I've compiled a list of actions you should avoid after a loss: Avoid immediately trying to recoup lost money. "Revenge trading" is a common mistake where a trader, after a loss, wants to take revenge on the market and quickly recover losses. This is purely a psychological and emotional problem. After a loss, it's better to take a break and objectively evaluate the situation before making a decision to enter into a new trade. Don't look for someone to blame for your losses. It's very easy to find a reason for your loss: market conditions, manipulators, other traders, or Telegram channels where you seek signals. Ultimately, you must take responsibility for your own decisions and actions. Look for the real cause! Don't rush to change your trading strategy after a losing trade. Radical changes in strategy after a loss can lead to new losses. Instead, re-evaluate the strategy and identify areas that need improvement, study the reason for the loss. A loss does not necessarily mean that the strategy is ineffective. Don't ignore risk management. Until you deal with risk management, you will suffer losses in the market again and again. A trader must have a risk management plan to protect themselves from a series of losses. Don't jump into hot trades on the spot and don't blindly follow the crowd. Take a break, conduct thorough analysis, and make a well-reasoned decision to enter into a trade. If you rush again or jump in with the crowd, it usually leads to even greater losses.
Education
by theanabioz
Top10 Mistakes to avoid as a New TraderIntroduction When starting out as a trader or investor, it is important to be aware of the mistakes that can be made. Mistakes are common, and even experienced traders and investors make them from time to time. However, new traders and investors are particularly vulnerable to making mistakes, which can lead to significant losses. In this article, we will discuss the top 10 mistakes to avoid as a new trader or investor, and provide tips on how to avoid them. Mistake 1: Lack of education One of the biggest mistakes that new traders and investors make is not educating themselves about the markets they are investing in. It is important to have a basic understanding of the financial markets, including the stock market, foreign exchange market, and commodity markets. Before making any trades or investments, new traders and investors should spend time learning about the different financial instruments, such as stocks, bonds, and options. They should also understand the basic concepts of fundamental and technical analysis, which can help them identify profitable trades. There are many educational resources available to new traders and investors, including books, online courses, and seminars. Some of the most popular books on investing include "The Intelligent Investor" by Benjamin Graham, "The Little Book of Common Sense Investing" by John Bogle, and "A Random Walk Down Wall Street" by Burton Malkiel. Mistake 2: Failure to set goals Many new traders miss out on setting goals. Having clear and realistic goals is important in trading or investing because it helps traders and investors stay focused and motivated. Some common goals for new traders and investors include building wealth, generating passive income, and achieving financial independence. Goals should be specific, measurable, achievable, relevant, and time-bound (SMART). For example, a SMART goal for a new investor could be to earn a 10% return on their investment within the next 12 months. Mistake 3: Emotion-based decision making Emotions can be a trader's worst enemy. Fear, greed, and hope can all cloud judgement and lead to poor decision-making. New traders and investors are particularly vulnerable to emotional biases, such as the tendency to hold on to losing trades for too long or to sell winning trades too quickly. To avoid emotional biases, new traders and investors should develop a trading plan and stick to it. They should also set stop-loss orders, which are orders to automatically sell a security when it reaches a certain price, to limit their losses. Mistake 4: Not having a plan New traders and investors often make the mistake of trading without a plan. A trading plan is a written set of rules that outlines a trader's entry and exit criteria, risk management strategy, and other important factors. A trading plan should include the trader's goals, risk tolerance, and trading strategy. It should also outline the types of securities the trader will invest in and the timeframe for holding those securities. A trading plan is important because it helps traders avoid impulsive decisions and stick to a consistent strategy. Mistake 5: Lack of diversification Another common mistake that new traders and investors make is failing to diversify their portfolio. Diversification involves spreading your investments across different asset classes and industries, which can help to mitigate risk and protect your portfolio against losses. For example, if you invest all of your money in a single stock or industry, you run the risk of losing everything if that stock or industry experiences a significant downturn. However, by diversifying your portfolio, you can help to reduce your exposure to any one particular investment and increase your chances of long-term success. There are many ways to diversify your portfolio, such as investing in a mix of stocks, bonds, and mutual funds, or investing in companies across different industries and sectors. Mistake 6: Chasing trends Chasing trends is a pitfall that many undisciplined traders make and this also happens to professionals. This can be dangerous and lead to significant losses. Chasing trends involves investing in a stock or asset solely because it has recently experienced a significant increase in price, without considering the underlying fundamentals of the investment. While it may be tempting to jump on board with a hot trend, it's important to remember that these trends are often short-lived and can quickly reverse direction. As a result, investing in a trend without doing your due diligence can result in significant losses. Instead of chasing trends, focus on identifying investments with strong fundamentals, such as a history of consistent earnings growth or a solid balance sheet. By investing in quality companies with a proven track record, you can increase your chances of long-term success. Mistake 7: Overtrading New traders and investors tend to 'overtrade'. Overtrading involves making too many trades or investments, often based on emotional impulses or a desire to make a quick profit. While it may be tempting to try to make as many trades as possible, overtrading can be harmful to your portfolio. Each trade comes with associated fees and commissions, which can add up quickly and eat into your profits. Additionally, making too many trades can increase your exposure to risk and volatility, which can lead to significant losses. Instead of overtrading, focus on making well-informed, strategic trades based on your plan and goals. By being patient and selective with your trades, you can increase your chances of long-term success. Mistake 8: Ignoring risk management One of the most common mistakes new traders and investors make is ignoring risk management. Risk management is the process of identifying, analyzing, and controlling potential risks associated with an investment or trade. This includes setting stop-loss orders, diversifying your portfolio, and understanding the potential risks associated with each investment. Many new traders and investors focus on potential profits and forget to consider the risks involved. This can lead to significant losses and can quickly wipe out an entire investment account. There are several ways to manage risk, including setting stop-loss orders, diversifying your portfolio, and conducting thorough research on each investment opportunity. Stop-loss orders are an effective tool to limit potential losses on any given trade. Diversification is also an effective way to manage risk by spreading your investments across different asset classes, such as stocks, bonds, and commodities. By ignoring risk management, new traders and investors increase the likelihood of experiencing significant losses. It is important to be proactive in managing risk and to always be mindful of the potential downside of any investment. Mistake 9: Focusing too much on short-term gains New traders and investors are focusing too much on short-term gains. While it is natural to want to see immediate returns on your investments, it is important to keep a long-term perspective in mind. Focusing too much on short-term gains can lead to impulsive decision-making and can cause investors to overlook the potential long-term value of an investment. Short-term gains are often associated with higher risk, and it is important to remember that high risk can lead to high losses. By focusing solely on short-term gains, new traders and investors may overlook quality investments that have the potential for long-term growth and stability. It is important to balance short-term gains with a long-term perspective. This means taking the time to research potential investments, identifying investments that align with your overall investment goals, and being patient with the investment process. Mistake 10: Lack of patience Finally, one of the biggest mistakes new traders and investors make is a lack of patience. Patience is critical in trading and investing, as it takes time to see returns on your investments. It is important to remember that investing is a marathon, not a sprint. Many new traders and investors are eager to see quick returns on their investments, and they often become impatient when they don't see immediate results. This can lead to impulsive decision-making and can cause investors to sell their investments prematurely, often at a loss. It is important to remember that successful investing takes time and patience. By taking the time to research potential investments, setting realistic expectations, and being patient with the investment process, new traders and investors can avoid making hasty decisions that can lead to significant losses. Conclusion In summary, trading and investing can be a rewarding and lucrative endeavor, but it is important to avoid common mistakes that can lead to significant losses. By educating yourself, setting goals, managing your emotions, having a plan, diversifying your portfolio, avoiding trend chasing, avoiding overtrading, managing risk, focusing on the long-term, and being patient, you can increase your chances of success as a new trader or investor. Remember, the key to success is to approach trading and investing with a long-term perspective and to be mindful of the potential risks and rewards associated with each investment opportunity. By avoiding these common mistakes and staying disciplined in your approach, you can achieve your financial goals and enjoy a successful trading and investing career.
BITSTAMP:BTCUSDEducation
by JS_TechTrading
☠️COMMON MISTAKES IN TRADING☠️ 1. Not having a trading plan: A trading plan is a set of rules that outlines a trader's entry and exit points, risk management strategy, and overall trading approach. Without a plan, traders are more likely to make emotional and impulsive decisions. 2. Not managing risk properly: Risk management is crucial in trading, as it helps to limit potential losses and protect trading capital. Traders should always use stop losses and position sizing to manage risk. 3. Overtrading: Overtrading is when a trader takes on too many trades at once, which can lead to over-exposure to risk. Traders should focus on quality over quantity when it comes to trades and only take on trades with a high probability of success. 4. Chasing losses: Chasing losses is when a trader tries to recoup losses by increasing their trade size or taking on additional trades. This is a dangerous behavior as it can lead to over-exposure to risk and a depletion of trading capital. 5. Not staying disciplined: Trading discipline is crucial for success. Traders should stick to their trading plan and avoid making impulsive decisions based on emotions such as greed, fear, and hope. 6. Not keeping a trading journal: Keeping a trading journal can help traders to track their progress, identify patterns in their trading, and make adjustments to their strategy. 7. Not having a proper understanding of the markets: Understanding the markets, economic news, and the underlying assets you are trading is crucial. Not having a proper understanding of the markets can lead to bad decision making. 8. Not diversifying: Putting all your eggs in one basket by not diversifying your portfolio can expose you to a higher risk. Traders should diversify their portfolio across different markets, asset classes, and strategies to minimize risk. 9. Not getting educated: it is much better to learn form other people’s mistakes especially if this can save you years of your time and thousands of dollars. There is no reason not to tap the wealth of knowledge accumulated by generations of traders because it will make you a profitable trader much faster. In conclusion, trading can be a challenging and risky endeavor, but by following a well-defined trading plan, managing risk properly, staying disciplined, and avoiding common mistakes, traders can increase their chances of success. Stop loss is a powerful tool to manage risk and limit potential losses, but it's important to choose the right method that suits the trader's strategy and risk tolerance. Keeping a trading journal, having a proper understanding of the markets, and diversifying your portfolio are also important to maximize your chances of success. It's important to remember that the most successful traders are those who are able to learn from their mistakes and adapt their approach over time. I Hope you guys learned something new today✅ Wish you all Best Of Luck👍 😇And may the odds be always in your favor😇 Do you like this post? Do you want more articles like that?
Education
by ProSignalsFx
6
❗️PLAN VS FOMO EFFECT❗️ ☑️A trader with a plan is someone who has a well-defined trading strategy that outlines their entry and exit points, risk management approach, and overall trading philosophy. ☑️They have a clear understanding of the markets they are trading and make decisions based on objective analysis and research. They are disciplined and stick to their trading plan, even in the face of losses or market volatility. They avoid impulsive decisions and emotions like fear of missing out (FOMO) that can lead to bad trades. ☑️On the other hand, a trader with FOMO is someone who makes impulsive decisions based on fear of missing out on potential profits. ☑️They may jump into trades without fully understanding the market conditions or conducting proper research. They may also ignore their risk management strategy, in an effort to make quick profits. They often enter trades based on rumors or tips from others, rather than their own analysis. This type of trader is more likely to make poor trades and suffer significant losses. ☑️In summary, a trader with a plan is someone who is disciplined, objective, and systematic in their approach to trading, while a trader with FOMO is impulsive, emotional, and reactive in their approach. I Hope you guys learned something new today✅ Wish you all Best Of Luck👍 😇And may the odds be always in your favor😇 Do you like this post? Do you want more articles like that?
Education
by ProSignalsFx
7
My Biggest New Trader Mistakes & Lessons LearnedI thought I'd share my experience with other New Traders (I'm still 'new', 2yrs in). I made all the classic mistakes and plenty more, my learning is only just beginning. Hopefully this educational post helps others new to trading. Use a Stop Loss So many times I didn't use a Stop Loss. One of the main reasons was I kept getting Stopped Out and then the price reversed, it made me paranoid. Also when the day changes at the start of the Asia session, or over the weekend with the gaps on market open, I thought I was better not having one. I've Learned: If you don't use a Stop Loss it's psychologically hard to get out of a losing trade and you can easily blow your account. I think it's OK to move the stops temporarily before the Asian open, but ideally the trade would only be left open if a) it's well in profit and b) the move looks likely to continue. Don't move your SL & TP I kept moving both of these stops, I either couldn't face the actual loss when a trade went bad (it seemed less real on paper and there was always 'the chance' it would come back in my favour) or I got greedy when the trade went in my favour and then before I knew it, it reversed and my profit was gone. I've Learned: Moving Stops and Targets risks profitable trades; it's psychologically damaging as it suggests lack of planning and strategy, this is gambling. On the other hand, having a plan and seeing it playout, however big or small is hugely satisfying and is the best confidence builder. Get In and Out I kept looking for the really big moves, and I had a few, but only a few. I believe the longer you're in a trade, the riskier it is due to the many factors that can affect price - Institutions, Fundamentals, Global Events, there are so many things that can turn a good strategy bad, and I lost money. I've Learned: There are so many trading pairs, so many options, there'll always be another trade. Staying in a trade for too long is leaving money on the table, when it could be in your account, getting out too early is annoying, but having profit on the trade is much more important. Leaving trades over a weekend I've left both winning and losing trades over a weekend, and many times previously winning trades went against me, and losing ones got worse. Price can be unpredictable due to fundamental changes over a weekend. I've Learned: On a Friday, unless 80% happy that your trade will continue in the right direction over the weekend, close it and review again after market open (you may lose a few but you will have banked profits or minimised losses in many cases). Keep Fundamentals in mind I follow some traders who don't seem to care about Fundamentals, but in that time I've seen many of their signals go bad because of big news. I think, that they think, that if the news is in their favour they reach target quicker. If it's not, they reach target slower, as the market has already decided future price regardless. I've seen fundamentals shape both shorter and longer term trends, they can easily cause reversals and commonly they cause spikes in the opposite direction from what you'd expect, before then moving as you'd expect, but this can be too late. I've Learned: Each pair / trade is different, however I've learned to take a pragmatic approach, often getting out of a trade before the news and waiting for the market to calm down before considering re-entering. This can mean missing out, but too many times I was on the wrong side of the news, I'm more profitable stepping back first. Have positive involvement in the TradingView community From time to time I see comments on Trader's ideas that are less than positive, as though the commentator can predict the future? As a community of retail traders we are up against the institutions and the big money movers who love to take retail traders' money, this means as retail traders we're all on the same team. The total value of all of our accounts is like comparing the size of an atom to a planet! I've Learned: If you don't like someone's idea, move past it, or discuss professionally. Be open-minded to ideas and celebrate success, 'like' ideas that you like and give positive comments where you agree, we're all in this together, and everyone is trying their best. Do your own research I signed up to loads of Telegrams and followed signals blindly, and it cost me a lot. It's too easy for people giving signals to only report on the successful ones. The community around trading, particularly TradingView is awesome but it can be confusing, for every chart, for every pair there is so much subjectivity. Previous price action does not dictate future price movement, if it did everyone would win. I've Learned: Don't put your destiny in the hands of others, read and learn as much as possible but create your own plan and strategy, it's much more rewarding, both psychologically and for me, financially. Take a Break I was watching the charts of my trades almost constantly, whether up or down I was watching them, but not doing anything. If losing (without a SL) I'd be watching hoping it would come back, if winning I'd often manually close too early, or leave it too long (FOMO) and it was too much and made no positive impact on my trading success, it just caused stress. I've Learned: To create my plan with all of these lessons in mind, and action it if the conditions are right. If I'm working on my personal trading development now, I'm looking for future trading opportunities, I'm setting alerts for future price action, I'm writing and publishing my ideas, and most importantly I'm taking a break to enjoy weekends, holidays and normal stuff! Writing and publishing this education article is really cathartic for me, it's helping me to keep embedding the lessons I have learned. The best lessons are the hardest ones, the expensive ones! I've just started publishing my ideas on here and I appreciate all the support I can get to becoming a better trader, hopefully one day I can be good enough to do this full-time. It'd be great to know if you've experienced these and other lessons as a new trader. Are there any more that you can share with me, and the rest of the TradingView community?
OANDA:XAUUSDEducation
by Finchcliffe
7
5 BIG MISTAKES TRADERS MAKE!Hey traders, I've had the privilege to have been involved in trading, both retail trading and working within a prop firm for many years. The biggest benefit I get, is to work with so many different traders with so many different strategies, personalities, timeframes, assets, you name it. I've probably worked with a trader that trades it. Now, there's a few things that are extremely common in all traders, regardless of what or how they are trading. It's the same mistakes that keep making traders fail. So today, I'm going to explain what five of these mistakes are and how to avoid them. I will also discuss how to incorporate them to ensure that you don't get hit by the stone wall that many traders do. If you have any extra information to add, please do so in the comments. I look forward to hearing from you all. TRADING WITHOUT A PLAN This right here is the biggest one and this is usually for the early beginners or even strategy jumpers. You must have a plan. That is non negotiable if you ever want to see some kind of consistency in training. I can tell you from experience, both personally and with working with traders from firms, that the more in depth that plan is, the better chance of success. The same way you create a business plan before launching a new endeavor. The same way you create a game plan for your team before you go out and verse the opponent. The same way politicians plan out their PR campaigns before running for office. You must have a thorough trading plan. A plan can consist of a multitude of different things, from understanding what you're willing to lose, understanding overall position size, understanding your trading strategy, minimizing drawdowns, maximizing profits, the assets you are trading, the times you're going to be trading, how much time you actually going to be allocating to trading and setting up goals. A trading plan must be thorough, so you can not only track your progress, but when you start getting unmotivated or confused, you have something to look back on to realign you with where you are and where you want to be. My final advice with your trading plan is stick to it. You will have bad trading days. You will have bad trading weeks. You will have bad trading months. Stick to your plan. OVERTRADING We've all been there. It's the start of a trading session. We've opened two positions. They've both gone on to be fantastic winners. You're unstoppable. Nothing can possibly go wrong from this point. You have mastered the markets. You are the best trader the world has ever seen. So what do you do? You open another seven positions because it's just free money on the table. And what happens? All seven of those positions lose, wiping off your original profit and some. This is so common in beginner traders. It's that aspect of unpredictability that they forget about in the markets. Trading too much too soon is a serious issue and it needs to be worked on as soon as possible. I understand the excitement of being live in the markets, the excitement of the profits you could earn day today, but the reality of the situation is if your brand new. Trading too much is going to be a serious issue. What sitting back watching and not trading does is not only increases your patience, but also allows you to analyze the markets in a clearer state of mind, making your future decisions a whole level ahead. Add that into the plan, give yourself a maximum number of positions per day if you are new. Trust me, it's going to help you progress. FAILING TO CUT LOSSES I've spoken about this a lot, especially in one of my recent webinars. A lot of traders are taught the whole set an forget method, and I'm not a big fan of it, but in some circumstances I won't lie. Yes, it does work. But a lot of the time, these trade ideas that they're in there actually give massive warning signals prior to hitting the stop loss that they are going to do that. The trader could have cut those losses a lot shorter. Now don't even get me started on traders that don't use a stop loss. What I wanted to do really in this segment is dive into the emotional side of failing to cut a loss. It's true. I remember experiencing it early on my trading career, that feeling of when a trades going against you, but you did all the analysis, so it shouldn't be going against you. So what do you do? You hold on with hope and temptation that it will turn for the better. The reality of the situation is in very, very rarely does. It's a horrible feeling because some traders are prone to even giving those trades more room, adding to the position, moving there stop loss, removing their stop loss altogether. Everything you shouldn't be doing in the time that your analysis is going against you, most traders lean towards because they done all the research they needed to do and they cannot comprehend bring wrong. The best way to battle this feeling, if you've ever felt it or still to this day feel that urge, is going back to number one. Trading with a plan. Have a plan. Risk management plans are the greatest things ever. We can plan for the absolute worst so when it does come in and everyone's going manic everywhere, we know exactly what to do, where to be and how to position ourselves. This will help you learn to cut those losses. NOT UNDERSTANDING LEVERAGE The world changed times are changing. You can access any type of information or access pretty much any type of market you want at the click of a button by the glorious internet. Same goes with trading is probably how most of you have gotten here, or even just into trading as a whole. The thing is, we reach out to these brokers and we open accounts with small amounts of money and they offer us great deals like 300 hundred or even 500 to 1 leverage. That means with $1000 account, you can open $500,000 of currency. Now, the reality of the situation is most traders will never use all of that leverage. But as a result is that most trade is also wouldn't have experienced a no money call when opening a position, or perhaps a margin call, or a true understanding of when they put in 0.5 lots of EURUSD, what they are actually doing. Leverage is a great tool. Fantastic tool. When used correctly. Working at the firm, had so many traders reach out. They keep getting an error code. They say, "I can't open this position!? WHY!?!" and it's all because they don't have the margin requirements to actually open that position and it is alarming to see how many traders don't fully understand what leverages and margin is considering they have used it for years. When you open a position of 0.5 lots on a U.S. dollar currency pair, for example, UUSDJPY. You are opening a position size of $50,000. You have just entered a $50,000 position. That means you are actively managing $50,000 while you are in that position. Let that sink in. Now that's just a position of 0.5 lots. There is traders pit there trading 10-100 lots and it is just baffling to understand the amount of risk there actually taking in accordance to their account size. Do your research. Understand your position size and when you're doing your trading journal. Instead of doing lot sizes in your trading journal, I recommend you do actual position size, value. That will give you a much better understanding on the risk you undertake when you take positions and also if you can, lower your leverage. You don't need 500:1. BEING ABLE TO ACCEPT LOSSES Now this is a fun one and this is what I really wanted to chat about. Being able to accept losses can be one of the most damaging things a beginner trader can ever have, because what happens is they lose the value and respect that the market can take their money. Every market "guru" and every trading course out there tells you to remove emotion from the equation, accept that losses are gonna be a thing, and trade knowing that. Now most people go, "OK, let's do that." and surprisingly, they actually managed to pull it off. Which actually creates a bigger problem. They become reckless. They no longer care if there's a little bit of parameters different from their trading plan. They no longer care if there's key indicators that the trade idea is wrong because, "we're going to have losses. So what? This one might as well be one. If you're not in the market, you're not going to make money." they become reckless. Do not remove emotion from your trading. Incorporate emotion into your trading and once again this results back to the first tip. Trade. With. A. Plan. Traders, that is all for me today. These are five things that I've noticed in struggling traders which seemed to be a common recurrence. Thank you for your time. I hope you enjoy the read. As always, have a fantastic trading week. -Jordon Mellor
Education
by the5erstrading
14
Why can't you make it?Hello dear traders, These are some common mistakes that i used to do that are part of my trading journey which is about 6-7 years. This is my first video on tradingview so apoligize for some pauses in my speech. I was a bit nervous when i did it. If you are at the beginning of your trading journey and it seems that everything is wrong, you gotta ask yourself why can't you make it? Here are some common mistakes that i did and some that i gathered from various discord and slack groups. 1. FOMO-ing (i guess this is in all the videos out there) - Remember that money goes from impatient to the patient. 2. Journaling - this is an important and key process of your trading journey. No matter how boring it looks, its gonna make you better i promise 3. Understanding macro concepts - this is a very important aspect and unfortunately it takes time to progress in this matter. There is always something to learn when it comes to macro economics. Its very important to gauge your sentiment from having a good understanding on what is happening globally. You can do it! Even if you trade mechanical its good to have it in the back of your head. 4. Not writing down key levels on a daily basis (updates of the assets you are trading) 5. Phone trading(while good to watch the markets sometimes) just so you know professional traders dont do it(probably only to adjust orders). We spend time in front of the desk like a regular job. Also it distracts you from being social and turns into an angry monkey because you are high on watching the markets. Been there done that. 6. Quitting your job to trade full time - before you make this switch make sure you are at least profitable for one year on a real account. This is a very common mistake and i met some people along my journey that ended up pretty bad. 7. Overtrading and spending 12-14 hrs in front of the pc - very unhealthy habit and it will turn into an antisocial being. Less is more! 8. Overleveraging - If you dont protect your capital, who else will do it for you? You are the warden of your money and you should treat them with a serious attitude. No one likes to lose so lose less until you get better to crank that leverage up. (use a degen account if you want to go banana on an account but not on the main account) 9. If you are in a trade with defined risk (don't micro manage it) leave it to play out. You already knew the risk from the beginning and you already defined it. Closing too soon can lead to consecutive losses. 10. Using more than 1% risk per trade. Dont go more than that even if its a small account. It will help you build confidence in time. 11. Having a good process -> how many sessions do you want to trade? 1 or 2? (london&new york) ...i mostly trade London and then calling it quits for the day. 12. Daytrading(just so you know there are days where you have to wait for the pricce to come to your levels and it may take a few days for one trade to actually happen) You know what to do in that spare time, learn about the markets and review your trades. If you want you can add more mistakes here. I hope your journey is a successful one and you want to become better everyday in everything you do. You can do it!
U
by Inorogu
📌📛Avoid these Common Mistakes in Trading Journey🚷🚫 ✳️Trading is a difficult process, and it often takes some time to figure out what works for you finding your edge . However, if you can avoid these common trading mistakes when starting your journey in the financial markets, then the learning curve will be much smoother. It’s important not only that we understand our own biases but also how they play into the way we trade so that we have an opportunity to manage them accordingly. All of this information has been highlighted in order to give traders more insights about common pitfalls so that they may steer clear of them going forward. Remember trading mistakes are a part of the journey and you won't be able to avoid them all. From those mistakes comes lessons, use them to better yourself and be one step closer to becoming a great trader. 🔰#1 No Proper Trading Plan Planning is very important for successful trading. If you fail to plan, then you must prepare to face the consequences and losses. Many new traders, with the overwhelmed interest, fail to plan and prepare themselves before they enter into live trading. Examples: -(Short-term goal/Mid-term goal/Long-term goal) -(Time frames and markets) -(-Strategy-Set-ups) -(Pre-market routine-Post-market routine) 🔰#2 No Discipline and Emotional trading Many new traders who are so confident assume that they know well about the market and thus lack to follow the rules or wait to know how the market is performing. They later become frustrated for not being able to tolerate even a small loss and thus withdraw within a few days. It's good to be excited about trading and confidence is always a welcome characteristic, but don’t let emotion dictate your trading behavior and push you into positions you wouldn’t normally take. Try to temper your emotions. Before launching into a trade, take half a step back and try to look at it objectively. Does it fit with your strategy? Are you doing it based on sound information or just a gut feeling? How would you react if the trade went against you? Come up with a Discipline and determinated system of cues that will help you protect yourself from too much emotional investment. 🔰#3 No Money Management Managing your money is very important. Most of the new traders tend to trade without using the protective stop-loss option. However, many are not aware of this option; however, in some situations, this option may also prove to be a wrong option. Perhaps, to sustain Intraday trading, you must be aware of such options that could save you. 🔰#4 Taking too big positions There is no doubt the attraction of a big winning trade is on every trader’s mind. And the temptation to take a big position (thinking it will be a winning trade) is always present. But as proven time and time again, taking too big a position on a trade can be risky. There is no guarantee the trade will go the way you want it to go. So, if you risk 50% of your capital in a single trade and that trade turns against you, it will seriously decrease your trading capital. And it may also take a big psychological toll on you as a trader. 🔰#5 Unrealistic Expectations for people who joined in financial market to become rich as soon as possible ,Do you expect to become as rich as them overnight? they cannot Walk the hundred-year-old overnight . says making money is easy with intraday trading. Remember, you must be patient, determined, and ready to spend enough time to learn. An increase in experience and profit can be made only consistently day after day,week after week and month after month ,or even maybe over a decade . 🔰#6 Revenge trading Don’t you hate it when you lose? And don’t you just want to get back into the market, take an other trade and prove you can be a winner? That’s exactly the thinking behind revenge trading. You want to get even. You want to prove you’re a winner.But most of the time revenge trading can bring more pain than gain.Consider this for a moment. When you get into a revenge trade, you’re most likely not in the best emotional state. You’re most likely still seething or too stressed out to make a sound trading decision. And most likely you haven’t really analysed the next trade – whether it has good potential or not. So, the best thing you can do about revenge trading is not to get involved with it at all. If you have a losing trade or a string of losses, it is better to step back and analyse what went wrong. 🔰#7 Leaving Too Early or Staying Longer This is another mistake new traders do. They either stay for long hours trading and waiting for opportunities or leave early in frustration. Both the situations are not favorable for best Intraday trading experience. 🔰#8 Following the social medias signals and crowd Following the crowd is a common trading mistake where inexperienced traders blindly follow the herd mentality, finding themselves in detrimental trades. It's important for novice traders to think about their own trading style when making decisions so that they don't jump into trends without conducting their own research and without understanding why it might work out better for them. If you enter into a trade by following someone else without performing any technical or fundamental analysis and a trade loses, you only have yourself to blame. 🔰#9 Trading in multiple markets at once Inexperienced traders may jump from market to market - from forex to indices and cryptocurrency to commodities. This is a common mistake and it can lead to over-trading and significant losses. 🔰#10 focusing on the win rate more than risk/reward Consider two traders(Trader A & B). Assume trader A have a 100 trade per month with a win rate of over 90%, and in each trade a profit of 1% comes out, but for trader B , with a lower win rate of 50%, but the risk to Reward is 1: 3, but The profit of the first trader is 90% in end of month, but the trader B is 150%. So a high win rate does not necessarily mean being more profitable, and the Risk/Reward of a trade can be even more important. 🔰#11 Being able to accept losses Many traders are under the impression that they can't make mistakes like investment professionals, but this is simply not true. If you jumped into a trade without doing your due diligence or you're a long-time earner and your portfolio has suddenly taken a dive, it's important to accept what happened and move on instead of letting your pride control your trading style, and hold onto those losers longer. There is always going to be another day and another trading opportunity. Learn from those previous losses to continue improving your skillset on the way to becoming a successful trader. 🔰#12 Not tracking trades in a trading journal Using a trading journal is a very critical part of becoming a successful trader. It isn't as simple as recording your entry and exits for profitable trades, it requires a bit more information and attention. Your trading journal should include all trades, good, bad and even the really bad ones.
COINBASE:BTCUSDEducation
by PRO_SMART_Trader
2
The Most Common Mistakes in TradingHello everyone, as we all know the market action discounts everything :) _________________________________Make sure to Like and Follow if you like the idea_________________________________ In today’s video, we will be looking at the most 3 common mistakes that traders do. Now everyone makes mistakes but I have noticed that a lot of people make these mistakes again and again and they always wind up losing trades because of these mistakes. Here are the most common mistakes in trading : I hope that I was able to help you understand these mistakes better and if you have any more questions don't hesitate to ask. This is not Financial Advice its a pure Educational video. Hit that like if you found this helpful and check out my other video about the Moving Average, Stochastic oscillator, The Dow Jones Theory, How To Trade Breakouts, The RSI , The MACD , The Bollinger Bands , The Different Types Of Trading Strategies, Candlestick Charts Part 1 & 2 and 3 , Classic Chart Patterns you need to know. links will be bellow
BITSTAMP:BTCUSDEducation
by GabiDahduh
15
5 TRADER'S MISTAKES IN TECHNICAL ANALYSIS AND PRICE ACTIONThe ability to interpret candlestick patterns and patterns gives us the key to understanding price movements. Once you learn how to read charts, you can trade any instrument in any market. From a technical point of view, everything seems to be as simple as possible. Why then most traders can't get stable profits? Of course, everything can be put down to lack of experience or an inoperative trading strategy. Trading psychology also plays a big role. Many problems arise due to lack of patience and discipline. Traders often tend to overcomplicate their market analysis. I have therefore compiled a list of the five most common mistakes in technical analysis and price action: 1 MISTAKE - LEVELS ARE DRAWN BY CANDLESTICK BODIES, NOT BY THEIR SHADOWS Cutting off candlestick shadows when making key levels is one of the most common mistakes. Notice the picture to the left - how the levels on the chart cut off several candlestick highs and lows. When you cut off candlestick shadows in this manner, you limit your ability to successfully trade on trend lines. Not only will you have difficulty identifying the breakout, you will also have difficulty identifying the right entry point. Now take a look at the chart to the right - here is an example of how we were supposed to draw a channel, how perfectly the support resistance levels match the highs and lows of the candlesticks. The difference between the two charts above may not seem like much. But all the nuances lie in the details. 2 MISTAKE - TRADING ON PRICE PATTERNS WITHOUT CONFIRMATION Being able to find price action patterns is great, but the patterns themselves often mean nothing. Many traders try to trade price patterns and patterns before they have even formed, hoping to enter the market at the best price. 3 MISTAKES - TRADING ON SMALL TIMEFRAMES Most traders want to make trades and profit every day. However, professional traders know how important it is to stay out of the market and wait for the right trading opportunities. They are extremely selective in opening trades and risk their trading capital with utmost caution. Most beginners prefer lower timeframes, because then they have the opportunity to trade more often. They believe that the more trades they make, the more money they can make. But in trading more trades doesn't mean more money. When it comes to technical analysis, the big timeframes will always give better signals. In doing so, they filter out most of the market noise. In other words, they smooth out price movements. This is especially true during periods of increased volatility. 4 MISTAKE - IGNORING SUPPORT AND RESISTANCE LEVELS I am referring to key levels that have been formed by the market regardless of the pattern you are trading. By being aware of all critical levels in the path of price movement, we can make decisions to close or hold a position based on logic rather than emotion. Therefore, always mark support and resistance levels first before entering the market. 5 MISTAKES - TRADING ON BAD OR UNCLEAR PATTERNS What do I mean by bad or unclear patterns? In a nutshell, they are patterns that are not immediately apparent. If it takes you more than a couple of minutes to find a pattern on a chart, it's probably not worth trading. Even if you have only been trading for a month and haven't yet studied all of the price action patterns, you should still be able to find price patterns in minutes.
Education
by Yuriy_Bishko
26
Does Trading Really Work?I’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. Does Trading Really Work? What I want to talk about today is, does trading really work? Because sometimes it feels that you’re going one step forward and then two steps back, doesn’t it? Yesterday, Rosemarie shared in one of my private Facebook groups. She asked: “How is everybody doing? I got out last Friday losing most of my gains, and yesterday I got stopped out of a loss during the same day and today I put on three trades, two long and one short, and they’re all in the red. Is everybody in the same boat or staying out of the market?” What is going on here? Does what Rosemarie shared sound familiar? This is where sometimes it really feels that you’re not moving. And let me show you what’s even worse. Traders will often look at some charts for big percentage movers and say, “Oh my gosh!” and will get in too late. Usually it’s penny stocks for companies like CARV . Very recently this stock went from $2 to $22. Another example of a stock that did this was COHN which was trading at $4 and then skyrocketed. These two stocks were up 300% & 137%. When you see this, you’re wondering, “Why can’t I do this,” right? They see a price spike, and buy a stock with no strategy in mind. You see, doing something like this with penny stocks it’s like winning the lottery. Have you ever heard of CARV before? They may have shot up, but then they came right back down. This is what usually happens. What goes up must come down, especially when it has these parabolic moves. 2 Things Needed To Trade Successfully So I want to share a little bit of what I have experienced in all my years of trading. You see, in order to trade and to trade successfully, you must have two things. 1. A Solid Trading Strategy The first thing that you need is a solid trading strategy. I’ve talked about this before. What exactly do you need in a trading strategy? What to trade Well, first of all, a trading strategy needs to first tell you what to trade, right? I mean, what stock, what option, what binary option, or what future market, it doesn’t really matter. When to enter It also has to show you when exactly to enter a trade. When to exit Then we need to know when to exit a trade. When it comes to exiting you can either exit with a profit, I mean, this is why we are trading, or you’re exiting with a loss, right? Both ways are possible here, and this is what a solid trading strategy does for you, it gives you this information. Now, as you know, I personally like to use the PowerX Strategy. This is the strategy that I like to trade here, and this is exactly what strategy Rosemarie is trading. 2. You Must Have Confidence In Your Strategy Now, the second thing that you need, based on my experience, is you need to have confidence in your strategy. We talked about this before, if you don’t have the confidence, you start chasing shiny objects, you jump from one strategy to another, from one newsletter to another, or you buy more & more tools. At least this is what happened to me in the beginning when I was lacking confidence. So confidence is absolutely important. Now the key question here is, “How?” People ask me all the time: “How do you have so much confidence in your plan?” Well here’s my answer: I know my numbers and I know what to expect. How to know what to expect You see, for example, how do I know what to expect? As I mentioned, I’m using the PoweX Strategy and I am using the PowerX Optimizer to find the best stocks and options to trade. That is the software that I use every day I’m actually using it at night to find the best trades, and then I confirm them the next morning. This only takes me, what, 15-35 minutes a day. When I run the software, I look for certain stocks and I look for stocks that give me at least a 60% return on my investment, per year. This means I’m expecting 5% per month. Now, I’m always happy when I’m surprised in a positive way, but these are my minimum requirements. I’m also expecting a 40% winning percentage. These are my requirements and yours might be different, but this is what exactly I’m expecting. A 40% winning percentage means 6 out of 10 trades are losing trades. I also expect a profit factor of at least 3. Now, what does a profit factor of three mean? It means that for every dollar that I lose, I expect to make at least $3 in return. So this is my ratio, and again, yours might be completely different, but this is what I’m looking for. So these are my expectations when trading the PowerX Strategy. Real Results From My Trading Account So let me show you some real results. As some of you may know, I opened a small account with tastyworks. I put $20,000 into the account because I wanted to see how quickly can I grow this account. I have been trading with my trading plan, on this account, and I want to explain to you exactly what happened. These were my statistics. These results are from June 17th, and went back almost a month prior to May 19th. I got 192 signals from the PowerX Optimizer Software in total. I then ruled out a few stocks according to my trading plan. I had 41 triggered and 31 filled. So this means over the past four weeks I’ve taken 31 trades. Now out of these 31 trades, 9 trades were still open, and I closed 22 trades. Now out of these 22 trades, I closed 6 with a profit and 16 with a loss. Now, I’ve just covered with you what I expect, and 6 out of 22 trades is 27%. So right now, my winning percentage is 27%. I expect a 40% winning percentage, right? So here, the strategy was underperforming. This is very important to understand because when you are trading a strategy, and you’re expecting a winning percentage of 40%, it means that in the long run, based on my experience, a good number of trades to look at is 40 trades. This is what you want to see after 40 trades. However, I only closed 22 trades, and it’s absolutely normal for every trading strategy to have times when they’re underperforming, or when they’re overperforming. You see, when trading, you don’t have this straight line that goes up from the lower left to the upper right, it doesn’t work this way. There will be dips, here & there, and you will see that sometimes it’s just going sideways, maybe even down, and then it takes off. So at this time my account was definitely underperforming, but over the next few weeks, I expected it to overperform. At this time, the account was underperforming, because the markets were nervous about what was going on with the virus. During these trades, markets were definitely nervous due to uncertainty with the rising number of new cases of Covid-19. I mean, we had a spike in cases in Florida, Texas, Arizona, but then overall, it seemed that our economy was rebounding, so these were definitely tricky times to trade. So this is why my account was underperforming, but there is more to it than that because again, the winning percentage is only one of the important factors. What I also expect is that I have a profit factor of 3 to 1. I was not quite there yet because my average losing trade was $200. This is very important to note here that I was keeping my losses small here. Think about it, this was a $20,000 account. So $200 per losing trade is 1% and the average winning trade is $433. So my loss after four weeks of trading was only $600. I told you I’d give it to you straight, and even though I’m really good at trading, I wish I could tell you that I’m always winning, but after four weeks of trading here, I had a loss of $600 in a $20,000 account. This loss however is only about 3%. That’s nothing, especially if that my average winning trade was $433. This means that one winning trade will get me close to break even, and a few more winning trades, and I’d be back up. I want to share something else with you. In my company, Rockwell Trading, we have a team here, and some of the team members are trading. One of the team members who is trading is Alex, who is responsible for all the tech support for the website, and all the backend stuff. We had a conversation through Skype about the trades he was taking at this time. Alex said: “I’m trading right now and I’m not doing well.” And I said: “Well, I’m not doing well either. Look at this. Check the stats, 22 losing trades, only 6 winning trades.” Exactly how I explained it here in this article, to which Alex replied: “Yes, I’m surprised you’re only down $600.” I asked him: “Why are you surprised? I’m keeping my losses small. This is the secret here one winning trade will bring me back to break even.” Alex had a realization and said: “I’m surprised that I’m only down $155 a month, and two more winning trades, and I’ll have a decent profit.” So you see, this I believe is the key. You have to keep your losses small. Is It Possible To Make Money Trading? I’ve been trading for a long time. I can’t remember exactly how long, but more than 20 years. I can give you my answer. YES, it is absolutely possible to make money with trading, and there are a few things that you need to consider. 1. Trading Is A Marathon, Not A Sprint Number one, trading is a marathon, not a sprint. When you see these crazy claims about “how you can turn a thousand dollars into a million dollars,” or “never have a losing trade again,” or “make 1,000%,” run away! I mean, here, I’m as real as it gets. I’m sharing my real results with you, from one of my actual accounts. This is one of my smaller accounts, and I have a total of 8 accounts. The results of this account are pretty typical of all the other accounts I’m trading on. 2. Stay Focused Number two, is it possible to make money with trading? Yes. Stay focused. Don’t jump from one trading strategy to another one. That is one of the big mistakes that I made in the beginning of my trading career. I mean, this is where I started trading a strategy and then when it underperformed, as this one did, I jumped to the next trading strategy, and then I jumped to the next trading strategy. 3. Stay Disciplined The third thing I believe is absolutely important is to stay disciplined. Let me tell you a story really quick. So my kids are sailing, and so we go to regattas all over the country. A few years ago, we went to a regatta in New Orleans. In the evening after the first day, one of the dads, Tony said: “Hey, you know, what? Do you want to go to a casino and play, gamble a little bit?” And I said: “Well, not much of a gambler, but sure, why not?” Tony and I went to a casino and we decided to play blackjack. I think we had about $500 each and, here’s what happened. Tony had a few losing hands, and after a while, his chip pile was down to half the money that he had. Now, I’m very conservative, as I’m really not much of a gambler, I barely know the rules of blackjack. Well when Tony was down almost half of his money, decided for the next round he was all in. No more discipline. All in. Does that sound familiar? What do you think happened? It was another losing hand and so we left the casino and Tony wasn’t so happy. This is also what I see happening to traders. After a few losing trades, often they do something stupid. I also did this in the beginning of my trading career. In the beginning of my trading career I clearly said: “You know what? After a few losing trades now let’s just increase the bet size and try to make back the money that I lost.” Have you ever done it? Because if so, you know exactly what happens. So it is super important to stay disciplined. How do you stay disciplined? How do you stay focused and disciplined? This is where we go back to having confidence. And you see it’s a full circle. And how do you have confidence? By knowing what to expect and by knowing your numbers. Has this been helpful to understand a little bit of what’s happening right now? And if you have a losing streak, it might not necessarily be new to you. Know what to expect and know your number.
TVC:SPX
by rockwelltrading
1
Trading After The Presidential ElectionThe aftermath of the election The presidential election is over, so it is safe to start trading again? First of all, as of writing this, we actually don’t know yet who has won the Presidential Election. As of this morning, Biden leads Trump in the Electoral College 264–214, and we are waiting for an update to see who won Nevada. If Biden wins Nevada, this will give him 270 electoral votes exactly enough to win the presidency. The Trump campaign has also filed lawsuits against the states of Pennsylvania, Michigan, Nevada, and Georgia as the race to 270 looks to be nearing its end. As of now, it is still a close race. We won’t have any updates until later today, as Nevada basically said yesterday: “You know what, we’ll keep counting, but stop bothering us, we’ll let you know tomorrow around noon. Until then we will not publish any more results.” we will see what is happening there soon. Looking back to last week, the markets were a little bit worried about a so-called “blue wave.” This means the Democrats would control both the House of Representatives, and The Senate. What it comes down to is, how is power being distributed? As of right now, it seems that the Senate COULD remain Republican. However, we’re not quite sure yet. It is very close, but it doesn’t seem that we have this “blue wave” that the markets were fearing. As for The House of Representatives, it seems that it likely to remain Democratic. So we still don’t know for sure who will control The House, The Senate, or win the Presidency. It’s still a close race. There’s still a lot of “would of, could of” and speculation as far as what will happen if Trump stays in office, or if Biden takes over. How is the election affecting the markets & traders? Yesterday morning, the day after the election, the markets were rallying big before pulling back a little bit. The DJI was up more than 900 points as it continued to shoot up that morning, before pulling back before the close. The S&P 500 was up 2.37% and its the same picture here, jumping up before retracing The NASDAQ was the leader of that day towards the close. Up 4.2% and as high as 5% earlier in the day. What is causing this? As I mentioned, looking at the election results so far, there doesn’t seem to be a “blue wave” coming. This means that there is a division of the powers and not everything in the hand of one party. This is what traders and the markets are looking for right now. A division of the powers could mean fewer regulations on ‘Big Tech’. This is why yesterday, the day after the election we saw big jumps in companies AAPL , AMZN , GOOG , etc. AMZN was up 6% near the close. AAPL was up over 5% and finished up over 4%. NFLX closed up almost 2%, FB closed up almost 8%, and GOOG and MSFT both closed up almost 6%. This is why The NASDAQ was leading the way higher, when before it was lagging behind The S&P 500 and The DJI . News from the election that is affecting the markets In California, voters pushed for Prop. 22. This will allow UBER and LYFT to keep classifying their drivers as independent contractors instead of employees. This was a big win for both companies resulting in both companies being up almost 12% and 13%. Another thing on trader’s minds is the stimulus deal (or lack of one). Recently, Senate majority leader Mitch McConnell said that a stimulus package should be passed by the end of the year. This is what market participants were waiting for, as new cases for the Coronavirus continue to rise. We are up to almost 95,000 new cases of Covid-19 a day, and Dr. Fauci has said that we are positioned really badly as we head into Flu season. It’s important to keep in mind that uncertainty could creep back into the markets as the Trump Campaign is calling for lawsuits, and as new Covid-19 cases continue to rise. Is it safe to trade after the presidential election? The key question is, “How do we trade this?” Before the election, I said that we should all sit on our hands. For those of you trading The Wheel Strategy, we had an opportunity, on election day, to close out a TQQQ 100 put that I sold. This is the ONLY position that I had going into the election. I sold this put last Thursday and I was able to buy it back on election day, for a nice profit of about $250, after only being in the position for 5 days. Now, the next morning when I saw the markets were up, I thought that after the initial excitement we would fill the gap. After we saw that we might not have any results from the election for a few days I thought we would hover where we opened at around $133 or maybe lower. Instead, we went higher so here’s what I did. I sold a call with a strike price of 148. I sold this call for $2.45 which means I took in another $245 in premium. My break-even price on this trade was around $132. At one point I was down $3,000 but I just kept selling more premium according to the rules of The Wheel Strategy. Overall I’ve realized $2,300 by selling premium. If I would have closed out the trade right then, I would have closed it with a profit, but I didn’t plan to do that just yet. Should TQQQ keep dropping, I will be able to buy back the call that I sold against my shares. If my shares are “called away” I would lose $200 of the premium I earned, but would still be up over $2000 on this trade. I checked this position yesterday and it started the day up $1,400, and this is the only position I am in. For now, I am not taking making any other trades. I may start trading again later this week, but for now, I’m just going to sit on my hands. The markets are still rather flat, trending sideways, as market participants are waiting for the final results of the election to come in. Trading After The Presidential Election Summary Whether you like what’s happening with the election so far, or whether you will like the final results of the election or not, as traders it is our jobs to react to this and make the best out of it by adjusting our trading strategies. With still a lot of uncertainty looming, I recommend sitting back and waiting to take any new positions until the air clears. There is a saying among sailors: “You can’t change the wind, but you can adjust your sails.”
TVC:NDQ
by rockwelltrading
Should You Be Trading Forex?In this article I’ll show you the pros and the cons of trading Forex so that you can decide whether Forex trading is for you. What Are The Pros of Trading For ex? The fascinating world of Forex. You see, it’s super easy to find the pros because there’s no shortage of ‘Forex Gurus’ out there telling you they’re the greatest thing ever! So let’s cover some of the pros of the Forex markets. 1. It’s open 24 hours Well, the first one that everybody tells you is that it is open round the clock. So it’s not like trading stocks where you have regular trading hours and then a few extended hours. No, it means that you can trade it 24 hours a day through the business week. It is the market that never sleeps. Now, we are trading from 5:00 p.m. on Sunday until 4:00 p.m. on Friday and these are Eastern times. But as you can see, it is open all the time. And this is intriguing to many people because they have still a daytime job and then they want to trade at night or in the evening or early morning. And this is one first pros you hear often about the Forex market. 2. “It’s the most liquid market in the world” There is another pro, this is where people say, “It is the most liquid market in the world.” What do they mean by this? It means there’s a lot of volume going on. I found that the average trading volume in the Forex market is around five trillion dollars every day. Now, in comparison, the New York Stock Exchange is making around 160 to 200 billion dollars. It’s peanuts compared to what’s happening in the Forex market. So this is why the Forex brokers tell you, “Why wouldn’t you participate in the most popular market in the world,” right? The most liquid market in the world. And if you’ve ever been caught in a trade that you couldn’t get out of, you understand what a plus it is to have a very liquid market. 3. No commissions What is another advantage here of trading Forex? Well, you have absolutely no commissions. These days, as you know, commissions have gone away for trading stocks. They are still there when you’re trading options and when you are trading futures. So, of course, it is super attractive when Forex trading says that there is no commissions, why wouldn’t you do this? When most people start trading, they’re trading for growth typically due to their account size (or lack thereof). Because of this, doing anything you can to preserve capital (i.e. no commission) can be very appealing. 4. Free tools Brokers are telling you, “We give you free charts and tools.” You get calculators, you get charting software, you get everything for free. Now, again, in 2020, right now, this is pretty much the standard. Most brokerages for stocks and options are also giving you free charts, watchlists, scanners, etc. But if you think a couple of years back, this is when brokers were still charging for everything from the data feed to additional features. Anyhow, with Forex trading, it was always free and it will always be free. Sounds good thus far, right? 5. You can start with as little as $10 So let’s talk about the fifth advantage here. You can actually start with as little as $10. Can you believe it? Most brokers ask you to fund your account with at least $500 or $1,000, and if you want to trade stocks and options, it makes sense to start with around $2,000 to $5,000, right? Here you can start with only $10. I Googled “Best Forex Brokers 2020” and I found the minimum deposits for these brokers are $100, $10, $0, $200, $100 — super easy to fund, and you’re getting a leverage of 500 to 1. What does this mean? It means that if you put $100 in there, you’re getting $50,000 buying power. I mean, amazing, right? What Are The Cons of Trading Forex? So it seems that just looking at this, there are so many pros why would you not trade Forex? Well, let’s talk about the cons here. 1. Foreign exchange First, let’s clarify what “Forex” actually means: Foreign Exchange So you would think, like the New York Stock Exchange or the CBOE, the Chicago Board of Options, that there is an exchange, right? Here is the deal, and this is the kicker. Most people don’t know this, but there is no foreign ‘exchange’. So how are you trading them? Well, this is the deal… 2. You’re trading against the house You are not trading against other traders. You are trading against the broker. Yep, that’s it. You are trading against the broker, and the broker is trading against you because there is no foreign exchange. Now, this is why here in the United States, Forex trading has almost been banned. 3. They are not trusted by the CFTC There’s this commission we have here in the U.S. called the CFTC, short for the Commodities Futures Trading Commissions. It’s a government institution, and they actually warn and protect us against Foreign Exchange Currency Fraud. On the CFTC’s own website, they have an article titled “Beware of Foreign Currency Trading Frauds,” and here is a highlight from the article: “Often, the investor’s money is never actually placed in the market through a legitimate dealer, but simply diverted–stolen–for the personal benefit of the con artists.” So let’s go back here. It’s the most liquid market in the world. However, again, there is no foreign exchange, right? There are no commissions, no fees, but these Forex brokers, they actually sponsor race cars according to a press release from McLaren.com. They’re also sponsoring RoboMarkets, which is another Forex broker. You might say, “So what? They’re sponsoring a few cars, who are watching Formula One anyhow?” Well, keep this in mind, sponsors are sponsoring Formula One with 30 billion dollars. You may also be thinking, “Well, big deal. I mean, here in the US we have football, right?” I mean, we have 32 teams in the league. However, the NFL sponsorship is only 1.5 billion. This must be why Forex brokers are not sponsoring the NFL. I mean, who watches NFL right? Kidding, but you get the idea. So they are sponsoring race cars, which is 30 billion, 20 times as much as the NFL. How They Make Money? So you might be wondering if there are no commissions if there are free charts and tools if everything is free how do they make money? How how can they sponsor a billion-dollar industry? 1. They steal money from you Well, we just talked about it. What did the CFTC say? They steal money from you. You are trading against the broker and it’s like playing against the house. In Vegas, when you’re playing against the house, who wins? The house always wins. 2. It’s addicting It’s also open 24 hours a day, just like Las Vegas. I mean, why would they close Las Vegas? Same with the Forex market, it’s because it is a billion-dollar money-making machine. You have to be very careful, especially when it is open 24 hours, it can lead to addiction. Same as Vegas here, because, hey, let’s just pull on the slot machine one more time. It’s the most liquid market in the world, but it doesn’t matter because you’re not trading against other traders. Even if there are millions and billions of traders in there, you’re trading against the house. 3. They trick you with free incentives and low buy-in There are no commissions, of course, but why would they charge you commissions when they steal your money? I mean, we have just seen it according to the CFTC. These are not my words, it’s their words, and they are an official government’s institution. They offer free charts and tools but the same idea here. Why charge you for these when they just steal your money. You see in Forex, you can start with as little as $10-$100, as I mentioned earlier. However, with stocks and options, as I said, I recommend that you have $2,000 to $5,000 here. So this is where we compare it again to Las Vegas. In Las Vegas there are 164,000 slot machines, right? You know, the slot machines where you only pay $0.25 to get started here? On the other hand, you have 600 poker tables. Why? At the poker table, your minimum buy-in is anywhere between $30 and $100. So you get the idea, right? I mean, this is why Forex is like a slot machine. And this is why they keep the entry-level low because they even let you fund an account with your credit card. Summary I promised you, first of all, that this will be eye-opening. Should you be trading Forex? Well, keep in mind, you are trading against the house. There are a few brokers that let you trade against other traders, but most brokers out there are taking the other side of your trade. They are providing you the quote. This is why they give you free quotes and free tools. Remember, there is no foreign exchange. Keep this in mind. So the key questions here are… Can You Make Money Trading Forex? Maybe. There are some traders who are really, really, really good, but the odds are against you. There’s people who come back from Las Vegas and they make money every single time they go to Vegas, but think about the majority. What happens to the majority of people when they go to Vegas? They lose money, right? So what should you do? Should You Trade Forex? Well, here’s my advice. If you want to trade, I would say trade stocks and options, and here’s why: You are trading against the house. I cannot say this often enough, but I hope that I can do this until it sinks in, until you realize that when trading Forex, you’re trading against the house. Let me know in the comments if you have some experience with Forex brokers, or if you have opened an account and what happened. Did you make money or did you lose money? I hope that this is helpful and tells you a little bit behind the scenes of what is happening in the Forex market. It is the biggest market in the world, a five trillion market, compared to the U.S. stock market worth 200 billion.
by rockwelltrading
2
The 5 Biggest Trading MistakesSo let’s talk about the five biggest trading mistakes that cause traders to lose money. And one of them is the account killer that I’m saving for last. When you are trading, you need to have a trading strategy. You already know this, this is nothing new. The 3 Key Elements To Every Trading Strategy There are three key elements to every single trading strategy. What to trade First of all, a trading strategy tells you what to trade, right? I mean, what stock or what options should you trade? What expiration? What strike price? So this is very important. And as you know, I’m using my software PowerX Optimizer to find the best stocks and options to trade. When to enter Number two, a trading strategy, whatever trading strategy it is, has to tell you exactly when to enter. When exactly should you buy or sell an instrument? Whether it is a stock or an option, it doesn’t really matter. When to exit Now, element number three is when to exit. Super important here and when we talk about exiting, there’s two ways to exit, right? So we can either exit with a profit and if this happens, then yay, this is good, right? Or losses are part of our business as a trader. So sometimes we have to exit with a loss. And of course, nobody likes it, but it’s part of trading. So the key here is that you have to keep your losses small, right? Anyhow, this is just a brief recap. These are the three major elements that every good trading strategy needs. So let’s talk about the five biggest trading mistakes, especially considering that these are the things. Trading Mistake #5 Trading mistake number five is trading the wrong stock or option. What do I mean by this? Trading the wrong stock or option means that you picked a stock and it is just diddling around while everything is taking off, right? It happens. And this is where often I see that many traders are picking stocks based on news, right? They hear, for example, “Tesla is making new all time highs.” “Amazon is making new all time highs.” Netflix, or Nio, the Tesla of China, right? And then they’re jumping in and realize, “Oh, this is not going anywhere,” or it is going down. So trading mistake number five, trading the wrong stock or option. Trading Mistake #4 The next trading mistake is entering too early. Has this ever happened to you that you were kind of right about the stock, but you entered way too early? Let me give you a very specific example. Because right now, as we are still in this pandemic, the airlines have been one of the industries hit the hardest. So you might say at this point, “Yeah, you know what? This is a good point to enter because airlines will go up again. People will travel again.” Right? And so you might enter there or you might actually say, “Oh, this didn’t work. Let’s enter here as there at $10.” Then they do in fact move up and you think, “Yay, I timed right.” But then it’s again coming down. Has this ever happened to you that you entered a trade way too early before you should have happened it? Now, especially if you are a PowerX Optimizer user, you know that with PowerX Optimizer and the PowerX Strategy you need to wait until it goes above a certain level. Has it ever happened to you that you jumped into a trade before it actually went to the level? Probably, yes. Trading Mistake #3 Let’s talk about trading mistake number three, and this is entering too late. Let’s use Netflix for example. When do most people enter Netflix? Traders like you and I, we are way smarter, right? But many are entering it when it says, oh, it’s going through a key level, like $500. And they say, “Oh, my gosh. Netflix is going above $500. I need to buy it right now.” And what happens after it went through a key level? It comes down again. Also, often when stocks make a new all time high, this is when many traders are getting interested in this. Might not happen to you, but, hey, based on what I see of why people are losing money, is because they’re entering too late after a move has already taken place. Trading Mistake #2 Let’s talk about trading mistake number two. And again, all of this is connected to your trading strategy, because when you have a trading strategy, you have just these three major elements here. So another trading mistake is taking profits too early. Has this ever happened to you that you got out of a trade too early? That you saw some profits and you were so excited, “Oh, my gosh, it was moving up.” And you took the money off the table and realized, “Oh, my gosh, I did it way too early!” and the stock just keeps going higher and higher and you would have made so much more money if you had stayed in. Let me just ask you, do any of these four trading mistakes resonate with you thus far? Just let me know in the comments if you made any of these four trading mistakes and then I’m going to tell you the number one mistake. The Trading Account Killer This here, this mistake is the trading account killer. What is it? What is the number one trading mistake that kills accounts? It’s not getting out of losing trades. Here’s the deal. This is why it is so important. You’ve got to know that this is what will kill your account. Can the other mistakes kill your account? Let’s talk about the other trading mistakes. Trading the wrong stock What happens when you’re trading the wrong stock? This could be a technical error. For example, I wanted to enter AAL and I accidentally typed in ALL. So it could be technical, or you just made a wrong choice, you traded the wrong stock. But that is not killing your account. When you realize you made a technical mistake, you get out of this as quickly as possible. Entering too early Now entering too early. Does this kill your account? No. All that happens is that you’re missing out on some of the profits because you’re getting into a stock that is not yet moving. I like to trade according to the PowerX Strategy. I want to wait until I see that the stock made a move and then I’m jumping in while the move gets momentum. So this is why the PowerX strategy is called momentum trading. But anyhow, does this entering too early kill an account? No, it does not. Entering too late Now entering too late. This is a problem because this is where if you are entering close to the top, you might enter right before a stock turns around. Now, here’s the good news. As you know, when we’re talking about a trading strategy here, when to exit, I like to work with profit targets. So I know exactly when I’m taking profits before I even enter a trade. And in order to keep my losses small I work with stop losses. And a stop loss, I set at 2% of my account. So I never risk more than 2% of my account on any given trade. This means that if I have a $10,000 account, I would risk $200. If I had a $20,000 account, I would risk $400, making sense? OK. So as you can see, if you are entering too late and you see, “Oh my gosh, the stock turns around,” you just get out of here. Taking profits too early Now taking profits too early, can this shred your account into pieces? No, because keep this in mind, nobody ever got broke taking profits. Why is not getting out of losing trades the #1 trading mistake? Think about it. Has this ever happened to you? It happened to me in the beginning of my trading career. In the beginning of my trading career I was trading bonds and I was bullish on bonds. I was convinced that they were just going up forever. And they didn’t, they came back and I just had an opinion. I just thought, you know what? No, these bonds will keep going up. Have you ever had a stock like this where you entered, and after you entered, it approaches your stop loss, but as it approaches your stop loss, you take the stop loss out of the market and then it keeps going down. And the $200 loss turns into a $300, $400 loss, and then into a $1,000 loss, then a $2,000 loss. So what should have been a stop loss turns into a larger loss. This is what I’ve seen over and over that is killing accounts. Accounts are not getting killed because you’re trading the wrong stock or because you’re entering too early or too late. Accounts are not getting shredded into pieces because you are taking profits too early. But if you hold onto a losing trade for too long, this is the number one account killer. That is for sure, so keep this in mind. Trading mistakes will happen There are trading mistakes that will happen. These are the big five. Of course, there’s more trading mistakes. You could, for example, go long when you intended to go short, or accidentally buy 1,000 shares when you only wanted to buy 100 shares. It’s also possible to accidentally buy 10 options when you only wanted to buy one. Keep this in mind, this will help you, when you make a mistake, liquidate. What does this mean? As soon as you realize that you made a mistake don’t hope that the market turns around, don’t hope that it gets better. Get out of this. Even if you get out of this with a small loss, right? This is how your account stays alive. And yes, losses are part of our business. As a trader, you will experience losses. The key is really here to keep your losses small. Recently traders have experienced more losses than usual because the markets have just been whipsawing, they’ve been going around. And one of the biggest mistakes that you could make is saying, “I don’t want to exit the trade because I don’t want to have another losing trade.” Trust me on this one, if you don’t take a loss when it is small, you will have to take a loss when it is bigger. Yes, of course, every now and then you might get lucky and the stock turns around. But let me ask you, when you held onto a losing trade for too long, did it turn into a winning trade? Sometimes it does, more often than this, it does not. Summary So these are the five mistakes. And the number one thing that I want you to take from this is: Get out of a losing trade when you see that your stop loss is hit. Have a stop loss, keep your losses small, and cut your losses short. This way you stay alive and then can benefit from the large move that will happen in the market. I hope that you enjoyed this article. If you did, do me a favor and leave a comment below or share it with anyone who might need to hear this, who might have experienced a larger loss.
NYSE:AAEducation
by rockwelltrading
20