7 Mistakes to Avoid When Trading or Investing:
1. Overconfidence
It’s easy to start believing you’ve mastered the game, leading you to take on more risk than necessary.
At first, you win, which boosts your sense of invincibility. But soon enough, the market reacts unexpectedly, and your judgment becomes clouded by the confidence from past wins.
Always stay critical of yourself and your strategy.
2. Greed or Ambition
Setting overly ambitious goals often leads to poor decisions. Getting rich overnight without putting in effort, learning, or investing your time is simply unrealistic.
There are no shortcuts to success. To achieve your goals, you need persistence and a strong drive to build the right skills.
3. Over-focusing
Using 10 screens won’t make you more money. Spending hours glued to charts only increases stress, anxiety, eye strain, and puts you in a trance-like state.
Limit your screen time to 5 hours per day and take regular breaks. Focus and productivity usually drop after just 2 hours of continuous concentration.
4. Idolizing and Comparing
Some traders make the mistake of constantly comparing themselves to others, especially seemingly more successful traders. They try to:
- Copy their strategies
- Imitate their setups
- Seek constant guidance
While it's okay to learn and get inspired, always think for yourself, analyze independently, and develop your own strategy.
Don’t put anyone on a pedestal.
5. Not Sticking to Your Plan
Respect your stop-losses and take profits wisely. You’ll never capture the full move of the market, and not all trades will be winners.
Aiming for an extra 1% can sometimes result in losing 50%. In trading, you give and take, but the key is to take more than you give.
6. Revenge Trading
You might feel like the market is out to get you, with prices always moving against your trades and triggering stop-losses.
However, if the market is consistently moving against you, it's likely a mistake on your part.
Accept your losses, be patient for the next opportunity, and focus on improving your discipline.