When I started trading, I did almost every possible mistake there is. I failed numerous times, went through times of large drawdown, and considered whether its even possible to earn a living trading. I quickly realized what my mistakes were, but it took me a very long time to actually correct them for good. The macro level mistakes are things like:
- Not having a trading plan
- Being under capitalized
- Trading in "non-trading" environments (not knowing when to just sit on your hands)
Those are things that you read about all the time. Today, I want to discuss micro level mistakes that retail and new traders make. These are thigns that even with a trading plan, plenty of capital, and knowing what to do; new traders "mess is up" anyways.
1) Retail traders chase the market
2) Ratail traders jump in too early
3) Retail traders get out too late
I came up with solutions for each of these mistakes. One thing that I started doing, which helped me a lot, is reading a list of rules every morning. The same list, each and every morning. Eventually, it gets memorized and your brain subconciously does not perform the mistakes.
1) Retail traders chase the market
-BE DISCIPLINED-
Plan the trade. Know what you're going to do when and define your entry signals. If the breakout occured and you missed it, wait for the pullback.
2) Ratail traders jump in too early
-BE PATIENT-
Simple, be patient and wait for the SIGNAL. Never anticipate a signal.
3) Retail traders get out too late
-DON'T BE GREEDY-
Nobody ever lost money taking profits. Another thing, never let a winning trade turn into a losing trade, always move your stop to positive.
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