by Alexandra Grose

Created on: January 15, 2010

I’ve written here: 7 Common Mistakes Traders Make. These mistakes seem to crop up time and time again. Understanding where your going wrong with your trading, is the first step in trying to rectify the problem.

1.Lack of knowledge. You’ve learnt some impressive entry points and a number of valuable indicators. It’s given you great confidence in your ability, but on it’s own great entries and good indicators aren’t enough. When you think you know it all, learn some more.

Thinking 'you must surely know enough by now,’ can get you into trouble. Trading is one of those subjects that you will always need to keep studying. You’ll have a lifetime of learning, when it comes to trading, particularly if you choose to trade for the shorter time frames.

2.Lack of patience. You’re watching a price rapidly increase and feel like you’re missing the move, so you jump in too early. Allow yourself to miss a move, there’s always another one coming along behind it. There will be a pull back, where you can gain a more promising entry.

Wait for the move, (it’s worth the wait to get it right) which will make the most money for the least risk. Weigh up the risk/reward, before placing the trade. Trade only if everything looks to give you a good return on your money, for little risk.

3.Not knowing when to sell. It’s not that hard to buy, but when do you sell? Should you wait for a further profit, or take that profit as soon as it’s available? If you’re losing, should you wait for a correction, letting the price fall further, or should you get out as soon as you see the fall? How do you know how far the rise/fall is going to be?

If your indicators read differently to what you anticipated when you started the trade, if the indicators do not do as you expected, or should they look to be positioned for a sell, that’s the time to get out of your trade. Have an idea in mind, of what your profit target is. When your price meets the target, sell. Even if the price continues in the same direction, after you’ve sold, (it might not always do so) you have got out with a profit (no one ever went broke, taking a profit), or you’ve at least minimised your loss.  

4. Buying when you should be selling and selling when you should be buying. You need to learn whether the big players are bailing out and jumping ship, or whether they’re getting in for the long haul. Your criteria,

• 1
• 2
• Next Page >>