Making mistakes out of fear and greed is very common among humans. But in trading, as much as possible, you should avoid these mistakes so as not to compromise your positions. You need to know how you managed to make these mistakes and overcome them totally. After all, if you want to claim victory, you have to muster your courage and learn everything about trading and the market that you want to invest in. Check out these five mistakes that are common but can be avoided if you plan your trades thoroughly.
Opening a Trading Position Without a Plan
You cannot expect the market to always go in the direction you have predicted even if you trade with a reputable trading platform like MetaTrader 5. If you trade out of your gut feeling, you might fail without redemption. There are also traders who expect that the market prices will increase very easily. But these instances only happen very rarely. Emotions then take part in the trade as the trader tries to convince themselves that the market price of the asset will still rise. And because you become unwilling to accept the loss, you keep on holding on to the position. The rate goes deeper and your losses increase. The root of this mistake is not planning the purchase of the asset.
Refusing To Cut Loss Sooner
Humans tend to deny the fact that they lost. It takes a couple of times for humans to realize and accept the mistake. This trait is not good when trading. As soon as you realize your mistakes, accept them and cut the losses as soon as possible. Because if you don’t you will end up blowing up your account.
Not Writing on a Trading Journal
You will only realize the importance of a trading journal if the time comes and you want to check something that you did in the past. If you don’t have a journal, you will simply rely on the data you get from your MetaTrader 5 trading platform. Although this trading platform offers a detailed history of your trades, it is much better if you create a more personalized journal where you can add your thoughts and opinions regarding the trade. Whether it’s a winning trade or a losing trade, you can add comments to help remind your future self to do or not to do several things.
Trading With Large Position Sizes
This is especially true if you are still new to trading. As you increase the position size, you also increase the risks on a single position. Do not put all your eggs in one basket when you are just beginning to trade. Start small and gradually increase the amount as you get along with trading and you understand how it works.
Not Enough Knowledge About Trading
You cannot go into a battle that you aren’t prepared for. Before you trade, you should see to it that you are well equipped with the knowledge that you need so that you can maximize its advantages. Anyway, there are currently a lot of ways to learn about trading. You can check online forums and webinars that tackle trading or buy some trading books.