Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Soultrader

Newbie Mistakes In Trading

Recommended Posts

I thought I'de start a thread discussing some of the mistakes new traders make when starting off with online trading. There are obviously hundreds (which I have committed all of them myself) so please feel free to add on to the list.

 

1. Undercapitalization - One of the first mistake I made when beginning to trade was being undercapitalized. I started with a $10K account without any idea on how to trade. You need enough capital to learn and gain the experience. Some like to call the initial stake "market tuition." If you can avoid paying your dues, great for you. But most new traders will lose their money. Just make sure you learn from every loss.

 

2. Having the approach to trading as a "learn as you trade" - Big mistake. "Learn as you trade" = losing money. Losing money can lead to emotional and financial stress and may even create enough fear in you making it hard to trade. Make sure you come prepared to the battlefield. Be a strategist. Sun Tzu said, "The battle is won before it is fought." Think about it.

 

3. Trading as a hobby - Take a look at your hobbies. Do they make money? Hobbies in general are entertainment that cost money. Do not approach trading as a hobby. Treat it like a business. Develop a business plan, have goals, and understand what you want out of trading.

 

4. Thinking that you know it all - The moment one thinks he knows it all is the moment he has become a fool. Its impossible to know everything about the markets. This is a lifetime learning process. Find your niche.... find your speciality and be an expert in it. In other words, find your edge. One thing I learned in trading is that niche = money.

 

5. Trading without a plan - One of the worst things you can do as a trader is to trade without a plan. Trading without a plan is like driving in a new area without a map or a navigation system. You are lost.

 

6. Not following your trading plan - Okay so now you have a trading plan. Why dont you just follow it? A common mistake among traders is not following a developed trading plan. This leads to impulse trading or emotional trading.

 

7. Wanting to be right - Are you trying to be right? Or are you trying to make money? This is a hard one... I personally have to battle myself to avoid this bad habit. Our egos interupt with our trading and we tend to want to prove something to ourself or someone else. The markets do not care what you think. You are in it to make money.

 

8. Money Management - Strict money management is a necessity. Set your risk parameters for all your trading setups. A common rule is to risk no more than 2% on one trade. I prefer 1%. Being long 10 different stocks at 2% risk per trade is not a good idea. In fact you are risking 20%. Know your size and do not double up your position after a series of losses. Be a grinder and not a cowboy.

 

9. Have realistic goals - Too many traders come into this arena without unrealistic goals. Questions like "Can I make a million my first year with a $10k account?" Sure you can..... but is that really realistic? Focus on crafting your trading. When you know how to trade the money will flow naturally.

 

10. Not analyzing yourself and your trades - This a poker habit I have. I tend to analyze every losing and winning hand to learn from it. Traders need to do the same and analyze every trade. Think about it after the trading hours and focus on what you can do to improve. Trading is a constant journey of soul searching as well. Understand yourself and you will significantly improve your trading.

 

I know there are tons of trading wisdon. Ill end it with just 10 and leave room for others to add. Best of trading.

Share this post


Link to post
Share on other sites

1.) In terms of actual trading, newbies lack the diverse background & experience needed to properly evaluate the environment around them. If a new trader were to sit next to me watching a chart develop, one would see just how significant that gap is.....as a professional I am going to recognize opportunity quickly while a newbie, even a talented one, would probably be too slow to see it, and too indecisive to pull the trigger.

 

2.) Clearly newbies are vulnerable to vendors selling a variety of products and services of questionable value. Again the lack of experience and background mean that newbies are vulnerable to being pulled off the "narrow path".

 

3.) Newbies underestimate the importance of risk management.

 

4.) Newbies underestimate the importance of waiting patiently for the right setup.

 

5.) Newbies underestimate the importance of documentation and learning from their failures.

 

6.) Newbies underestimate the importance of continued learning. Professionals often have a variety of skills including the ability to program (pick any computer language), to backtest or characterize markets, to use a spreadsheet, to understand and utilize basic descriptive statistics. Skilled traders are always learning about the markets, how they work, new rules, new developments...they continue to learn and improve their skill sets and most importantly they do so because they enjoy it....Newbies often have significant gaps in their understanding of how markets actually work.

 

7.) Finally and perhaps most importantly, newbies underestimate the importance of understanding human behavior. It is after all, human beings who move markets...understanding how other participants think and view the markets is critical to a trader's long term success.

 

I hope this helps.

 

Steve

Share this post


Link to post
Share on other sites

Newbies that wants to be a trader but they scared of losing money will make them lose more and more money. They cannot accept losing and what they want is always the winning.

 

Newbies must understand that investing is risky, any investment is risky. They think trading this type of market can make them rich quick.

 

Me myself takes time to understand about trading and market. Almost 5 years i have been trading and get nothing, all my money gone. Then i realize trading is not easy! no quick rich scheme! even the top successful trader also lose money.

 

Sorry for my english. :cool:

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 21st February 2025.   European PMI Disappoint, Weighing on Euro Before German Elections   The Euro is the first currency to witness the volatility on this month’s PMI reports. The French, German and British PMI data have resulted in the Euro being the worst-performing currency of the European Session so far. However, will the Euro continue to decline throughout the day? European Purchasing Managers’ Indexes The French Purchasing Managers Index was the first European index to be made public. The release resulted in the Euro instantly declining 0.24%. The main concern from the French data was the Services PMI which fell from 48.2 to 44.5. Previously the market was expecting the data to remain more or less unchanged. The weak data triggered the decline which came to a halt after Germany’s PMI was released.     The German Manufacturing PMI read 0.5 points higher than previous expectations and the Services PMI was 0.2 points lower. The data from Germany was a relief for Euro investors and the price rose 0.12% higher. However, traders should note that the price of the EURUSD continues to remain 0.20% lower than yesterday’s close. The price of the EURUSD will now depend on the PMI data from the US. The value of the US Dollar will depend on its PMI release this afternoon and the Consumer Sentiment Index. Analysts expect both the US Services and Manufacturing PMI data to remain above the 50.00 level in the expansion zone. German Elections 2 Days Away Germany is set to hold a general election this Sunday, February 23rd, following the collapse of the coalition of social democrats, liberals, and greens. Given the country's highly proportional electoral system, German polls provide a strong indication of potential government formations post-election. The main concern for Germany is the AFD party who are Far-Right Nationalists. Currently, ahead in the polls are CDU (centre-right), and AFD (far right), followed by the SPD (centre-left). Traders should note that the results of the elections are likely to trigger strong volatility on Monday, but also influence volatility today. Economists may become further concerned if the far-right gains power for the first time due to uncertainty. If the government, similar to France, is unable to form a coalition, this would also be a concern for the Eurozone. Furthermore, the Euro this week is also under pressure from comments from members of the European Central Bank. ECB Governing Council member Fabio Panetta said to journalists that officials need not slow interest rate cuts, as January's 2.5% inflation is still expected to reach the 2.0% target this year. He also advised the European economy is weaker than previously expected. EURUSD - Technical Analysis and Indicators The EURUSD is trading above the 75-bar Exponential Moving Average and 100-bar Simple Moving Average on the 2-hour chart. However, the price is moving away from the key resistance level at 1.05058 indicating the price is losing momentum. The short-term volatility is indicating the price is retracing downwards. On the 5-minute timeframe, the price is trading below the 200-bar SMA and is also forming clear lower lows and highs. Simultaneously, the US Dollar Index is trading above the 200-bar SMA on the 5-minute chart confirming no current conflicts. Currently, the US Dollar is the best-performing currency of the day attempting to regain losses from the past 2 weeks. Watch today’s Live Analysis Session for more signals as they develop!   Key Takeaway Points: Weak French Services PMI triggered an initial Euro decline, but German PMI provide a slight relief. However, EURUSD remains lower than yesterday’s close. The Euro’s direction now depends on the US PMI reports, with analysts expecting US data to stay in expansion territory. Sunday's German election could drive volatility, especially if the far-right AFD gains power or if coalition formation proves difficult. ECB official Fabio Panetta suggested no need to slow rate cuts, citing weaker-than-expected economic performance and expected inflation decline. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • BE Bloom Energy stock, watch for a range breakout, target 34 area at https://stockconsultant.com/?BE
    • APLD Applied Digital stock. nice rally, watch for a top of range breakout at https://stockconsultant.com/?APLD
    • UAL United Airlines stock, watch for a narrow range breakout, target 122 area at https://stockconsultant.com/?UAL
    • WBD Warner Bros Discovery stock, watch for a range breakout at https://stockconsultant.com/?WBD
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.