Inspite of knowing many things in trading people still commit mistakes, whether they are done unknowingly or because of the fear and the mindset, which they have, needs to be known. Here are some common mistakes, which many traders do.

1. Many traders trade without a plan. They do not define specific risk and profit objectives before trading. Even if they establish a plan, they do not stick to it, which results into loss.

2. Many traders do not realize the news they hear and read is factored by market, so it is not advisable to take decisions by sitting in front of TV and watching news along with analyst’s views proves risky while trading.

3. after several profitable trades, many speculators become wild and aggressive. Which is unwarranted and not wise to do in any intraday trade?

 4. Traders often try to carry too big a position with margin amount and that proves suicidal when market goes against the trend which was expected which results in huge losses.

5. Some traders try to “beat the market” by day trading, nervous scalping, and getting greedy. However, they forget that market is always one-step ahead of everything and human mind cannot beat it.

6. They fail to pre-define risk, add to a losing position, and fail to use stoploss thinking that they know everything but that again results into losses.

7. They frequently have a directional bias; for example, always wanting to be long but it is not good you have to be short also sometimes when the trend is other way around otherwise it will result into loss.

8. Lack of experience in the market causes many traders to become emotionally and/or financially committed to one trade, and unwilling or unable to take a loss. They may be unable to admit they have made a mistake, or they look at the market on too short a period. It is always advisable to learn from your mistakes and move ahead rather than being stubborn and making losses.

9. Overtrade is another thing which many indulge into when they make loss in one trade, Which is never advisable as it might be one of the bad days, So always a person should not do more than 5 trades per day by dividing his capital equally in all the scrips.

10. Many traders do not want to take the small losses. In addition, often stick with a loser until it really hurts, then take the loss. This is an undisciplined approach…a trader needs to develop and stick with a system

 

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