What is the cause of the biggest trading losses? Is Your Trading Destroying Your Capital? These are questions you must ask before starting trading. These top 30 reasons will help new traders avoid losses.
“What was the source that is Destroying Your Trading Capital?”
- Having no plan for getting out of the trade.
- Being certain of your position on an asset’s direction.
- You have the arrogance to believe that you know how the trade will turn out.
- You believe you are unstoppable.
- Over-trading.
- Believing that the market must fall as predicted by a guru or a YouTuber.
- Allowing a guru to persuade you that instead of placing a Stop-loss, you should wait for a reversal
- Sizing of the position is incorrect.
- Greed is when you trade too big and take on too much risk.
- Taking too much Margin
- There are no hedges.
- Not realizing that a bull market has come to an end
- Weak risk management.
- Your ego takes control of your trading.
- You opt out of taking your initial stop loss.
- Believing that a losing trade will simply reverse.
- Purchasing a stock because it is a ‘value’ that has dropped another 50% since your initial purchase
- Trading without a positive expectancy model is a risky proposition.
- Trading options without knowing how to set stops or use proper position sizing is a recipe for disaster.
- Thinking that “Stock Has To Come Back”.
- Trading without a strategy.
- You don’t have any trading rules in place for your system.
- Not adhering to your trading guidelines.
- Averaging the trades without reason.
- Trading without a competitive advantage
- Attempting to outsmart the market.
- Option trading with illiquid options.
- In your time frame, you’re fighting the trend.
- Using feelings to trading signals.
- Using greed to size positions
Conclusion
These 30 items have the potential to cost a trader a lot of money. You can avoid these blunders. You’ll find yourself on the winning side of your trades, with money from less knowledgeable traders filling your account. Trade with care.