Here are some mistakes that every trader makes that you should avoid
A thread 🧵for traders:
A thread 🧵for traders:
1. Overtrading
This can be:
a) Too many trades
b) Too many stocks
c) Too big a size
d) Too many days of trading
Over trading is the number 1 reason why people lose money. Take a few trades, in 1 or 2 stocks, with constant bet size. And trade occasionally with breaks
This can be:
a) Too many trades
b) Too many stocks
c) Too big a size
d) Too many days of trading
Over trading is the number 1 reason why people lose money. Take a few trades, in 1 or 2 stocks, with constant bet size. And trade occasionally with breaks
2. Not putting a stoploss
Please put a reasonable stop loss in your trading terminal. Do not keep the stoploss in your mind. And DO NOT shift your stoploss too often.
If you lack this discipline, trying taking limited loss option spreads where max loss = your loss at stoploss
Please put a reasonable stop loss in your trading terminal. Do not keep the stoploss in your mind. And DO NOT shift your stoploss too often.
If you lack this discipline, trying taking limited loss option spreads where max loss = your loss at stoploss
3. Trying to catch highs and lows
Do not buy anything at a new low - whether intraday or otherwise. It is likely to go lower.
Do not short sell anything at a new high - whether intraday or otherwise. It is likely to go higher.
Do not buy anything at a new low - whether intraday or otherwise. It is likely to go lower.
Do not short sell anything at a new high - whether intraday or otherwise. It is likely to go higher.
4. Averaging by buying more
When you take a trade and make losses, many traders have a tendency to buy more of it because it improves the average price. It also make them think on a bounce they will recover everything. But if the trend continues you will go bankrupt
Huge mistake
When you take a trade and make losses, many traders have a tendency to buy more of it because it improves the average price. It also make them think on a bounce they will recover everything. But if the trend continues you will go bankrupt
Huge mistake
5. Trying to recover lost money quickly
Losses happen in trading. You need to be okay with that fact. If you are uncomfortable sitting on a loss, you will try to recover it quickly by trading more. And you will end up trading more at times you are not reading the market right
Losses happen in trading. You need to be okay with that fact. If you are uncomfortable sitting on a loss, you will try to recover it quickly by trading more. And you will end up trading more at times you are not reading the market right
6. Impulsive trading
If a trade did not occur to you earlier when you were planning your trades, then it is best to avoid that trade. Avoid unplanned trades as much as possible. Always have a pre decided plan to trade
If a trade did not occur to you earlier when you were planning your trades, then it is best to avoid that trade. Avoid unplanned trades as much as possible. Always have a pre decided plan to trade
7. Not putting in work
Spend at least 20 minutes every day analysing the markets. Analysing - and NOT looking at markets, NOT reading the news, NOT watching TV. I mean looking at Charts, Open Interest Data, Technical Positioning, FII etc. Whatever your style is, put in the work
Spend at least 20 minutes every day analysing the markets. Analysing - and NOT looking at markets, NOT reading the news, NOT watching TV. I mean looking at Charts, Open Interest Data, Technical Positioning, FII etc. Whatever your style is, put in the work
8. Looking at your P&L all the time
If you are looking at the P&L all the time, who will look at the markets? Who will see the chart patterns, changes in data, etc?
Also, this is extremely stress building, and focus destroying. This is one habit you NEED to cut
If you are looking at the P&L all the time, who will look at the markets? Who will see the chart patterns, changes in data, etc?
Also, this is extremely stress building, and focus destroying. This is one habit you NEED to cut
9. Not taking breaks
Your objective is a good life. Money is a tool for that. You trade to get money for a good life. And because you enjoy it
But there is a fine line between enjoyment and addiction. Be mindful of that. So take breaks from trading, and focus on your life
Your objective is a good life. Money is a tool for that. You trade to get money for a good life. And because you enjoy it
But there is a fine line between enjoyment and addiction. Be mindful of that. So take breaks from trading, and focus on your life
If you found this thread useful, please share it and retweet it. And if you would like to read a collection of my random thoughts about trading please check out the free trader's manifesto on Sensibull
web.sensibull.com
Thank you, and have a great day
web.sensibull.com
Thank you, and have a great day
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