Well the obvious ones are holding on to losses hoping for a recovery without reassessing the value of the position;
And adding to losses still believing the original decision was sound, but again without proper re-examination of the circumstances.
Entering a position is easy; exits are much more difficult; no-one should ever open a position without a plan for exiting.
And adding to losses still believing the original decision was sound, but again without proper re-examination of the circumstances.
Entering a position is easy; exits are much more difficult; no-one should ever open a position without a plan for exiting.
It's so true, holding onto losing trades without reassessment and adding to them can lead to significant losses. Having a well-defined exit plan from the start is key to responsible trading.
MrMosquito
Junior member
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The first thing is that they think becoming a trader is an easy thing
the next is that they think the most important thing they should learn is technical analysis, then they think they can become super reach and earn like 500% in a single day, spending a very short time. I also recently watched a video about this, on YouTube but I think it's not ok to post a link here! or is it?FranziskaSchulz
Member
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Escape!
If you do not accept them, do not know that they are the result of your trading strategy and did not come out of nowhere.
So, accept them, understand them, and apply them to your trading strategy.
If you do not accept them, do not know that they are the result of your trading strategy and did not come out of nowhere.
So, accept them, understand them, and apply them to your trading strategy.
rkotrading
Junior member
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I could list so many.
Main 3:
- lack of discipline
- over leverage
- not accepting losses
Main 3:
- lack of discipline
- over leverage
- not accepting losses
ThaddeusFinch
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I think one of the common mistakes is fail to set or adhere to stop-loss. This can lead to significant losses.
You're spot on about the misconceptions novices often have. Trading indeed requires more than just an understanding of technical analysis; it's also about managing expectations and recognizing the time and effort needed to achieve success. As for sharing resources like YouTube links on Trade2Win, it's generally acceptable as long as the content is relevant and adheres to the forum's guidelines. Such resources can be incredibly valuable for learning and discussion. Thanks for bringing up these pointsThe first thing is that they think becoming a trader is an easy thing
Well said! Accepting and learning from losses is key. It's all about using them to improve your strategy. Spot-on advice!
Spot on with the big three: discipline, leverage, and accepting losses are key areas to focus on. Addressing these can really turn things around for traders. Excellent points!
timsk
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This is slightly off-topic as it doesn't directly answer the OP's question about common mistakes that novice traders make when dealing with losses, but it is one which causes losses and is probably the least discussed or mentioned on forums like this one. Namely, trading without context: context is king. I suspect it doesn't much matter what type of trader you are, what tools you use and what set ups you employ: you can adhere to your strategy with iron discipline and robotic accuracy but, if the novice trader does not take context into account - as is so often the case - an otherwise sound and potentially profitable strategy is almost certain to fail. If not in the short term, then definitely in the medium to long term.
A simple example to illustrate the point is a novice trader who uses RSI. In a range bound market, the indicator will scream overbought or oversold to generate quite good sell or buy entry signals accordingly. However, in a market that's trending, it will give the same strong signals and the novice trader who takes them and ignores the overall context will come seriously unstuck. Big time!
A simple example to illustrate the point is a novice trader who uses RSI. In a range bound market, the indicator will scream overbought or oversold to generate quite good sell or buy entry signals accordingly. However, in a market that's trending, it will give the same strong signals and the novice trader who takes them and ignores the overall context will come seriously unstuck. Big time!
Certainly! You've highlighted a crucial oversight many novices make: ignoring market context. Your RSI example perfectly shows why understanding the overall market is essential for strategy effectiveness. Novice traders should strive to grasp the bigger picture to avoid such pitfalls. Thanks for emphasizing the importance of context in trading success.
