1. Emotional Trading
Holding “losing” trades for too long. This often stems from a fear of selling the asset, or simply hoping that the price swings in your favor.
2. Trading Red News Events
“Red” news events are major announcements. They have a significant impact on financial markets – for better or worse. While this volatility can seem attractive to day traders, there’s a clear downside
3. No Risk Strategy
Every trade carries risk. There’s always the chance you could lose money. That said, you can mitigate risk by having a clear risk strategy.
Be clear about your own risk tolerance and don’t exceed it. Start small and learn lessons from your trades. Identify how much risk you’re comfortable with and be strict about your entry and exit points.
4. Investing More Than You Can Afford to Lose
This is a critical mistake any trader can make! When you’re caught up in the thrill of the market, it’s easy to keep buying. But invest more than you can afford to lose, and your journey could be over before it starts.
5. Gambling
Sure, gambling sometimes pays off. But it’s risky. It’s not based on any strategy or technical analysis. And it’s not a reliable way to build your trading skills or make a profit.
Gambling usually means you’re caught up in emotional trading as described above. It’s another trading psychology mistake, and one best avoided.
