Article The Top 10 Mistakes Traders Make and How To Avoid Them

T2W Bot

Staff member
1,421 44
#1
Achieving success in trading requires avoiding numerous pitfalls as much, or more, than it does seeking out and executing winning trades. In fact, most professional traders will tell you that it’s not any specific trading methodologies that make traders successful, but instead it’s the overall rules to which those traders strictly adhere that keep them "in the game" long enough to achieve success. Following are 10 of the more prevalent mistakes traders make.
This list is in no particular order of importance.
1. Failure to have a trading plan in place before a trade is executed.A trader with no specific plan of action in place upon entry into a trade does not know, among other things, when or where he or she will exit the trade, or about how much money may be made or lost. Traders with no pre-determined trading plan are flying by the seat of their pants, and that’s usually a recipe for a "crash and burn."
2. Inadequate trading assets or improper money management.It...
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TWI

Senior member
2,516 246
#5
Perhaps the biggest mistake is to believe you know.
Perhaps the most important thing to realise is that it is just a probability game.
Perhaps the the hardest thing to become comfortable with is that trading is just as much about taking losses as it is about taking profits.
 

schoe

Well-known member
343 3
#6
Grey1 said:
The most important mistake is to trade without enough software power at your disposal ..

grey 1
Grey. I was wondering which software you recommend as being important. Nice to see you post on here again.

Regards Schoe.
 

Grey1

Senior member
2,185 175
#7
schoe said:
Grey. I was wondering which software you recommend as being important. Nice to see you post on here again.

Regards Schoe.
Schoe,

The bank I trade on behalf like many other institutions uses proprietary algorithm front end to vhayu vwap engine to both shift and execute large positions as well as identifying arbitrage opportunities on US stocks to minimise the market direction effect .


PS:- I have already explained most techniques in Arb trading using VWAP in my previous posts.. Serious traders can enjoy a wealth of info on this site with simple and practical examples given by myself to develop an automated trading engine similar to the VHAYU engine

look at http://www.vhayu.com/ specially the pair trading sub link

Grey 1
 
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bracke

Experienced member
1,286 12
#9
I think that the dangers of averaging down when long and averaging up when short should be mentioned. The practice appears to be a common error by new traders.

Regards

bracke
 

RUDEBOY

Experienced member
1,157 6
#10
Don't ever think the markets are some kind of 'easy ride', That's No.1. No.2, do you realise what you are up to? Does your wife know the full facts.........i bet she doesn't? No.3, if you are trading for a company........go for it. You'll be a security guard faster than you can wink!
 
#12
RUDEBOY said:
Don't ever think the markets are some kind of 'easy ride', That's No.1. No.2, do you realise what you are up to? Does your wife know the full facts.........i bet she doesn't? No.3, if you are trading for a company........go for it. You'll be a security guard faster than you can wink!
you have ceratinly excelled in the last 24 hrs. I take it that the rash of verbiage we have heard of late is merely corroboration that all the above have applied and indeed probably still apply to your goodself.

How is the front desk?
 

counter_violent

Legendary member
9,257 2,338
#13
jimbo57 said:
you have ceratinly excelled in the last 24 hrs. I take it that the rash of verbiage we have heard of late is merely corroboration that all the above have applied and indeed probably still apply to your goodself.

How is the front desk?
You can go beyond replying to it !

I did !

C V
 

cwang

Junior member
21 0
#15
bracke said:
I think that the dangers of averaging down when long and averaging up when short should be mentioned. The practice appears to be a common error by new traders.

Regards

bracke
Not just buy new traders. If you look at the top 30 blew up in trading history, from the latest trader magzine, most of them were caused by averaging, or a variation of it.

A guy in japan ended up with 5% copper of the whole word, and earned title of Mr. five percent.
"Rogue Trader" took down a bank
and the list goes on.

This is a common arithmatical mistake we see often:
I'll bet one dollar
If I lose I bet two more
then four more
then eight more
whenever i win, i go back to one dollar bet
"there is no way I will get 30 straight loss"
so all my trade end up winning

If this algorithm is backed by a big bank (i.e. the trader is an employee)
he may end up winning 100% for, say half a year.

However, since trading as a career. everyone will eventually get burned.
 

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