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hello traders and welcome back to
another survival guide all of us as
traders make mistakes at some time or
another some of us if we're willing to
admit it make mistakes every single day
not all of these mistakes are massive
painful and very hurtful mistakes per se
but we make mistakes nonetheless and the
reason that that's important to be aware
of is because it provides opportunities
for us to improve today we're going to
talk about all of the most common
mistakes that technical analysis and
just traders in general make and if you
identify with any of these be honest
with yourself because it could be
something beneficial to you if you find
a way to curb it or make it happen less
let's get rocking and rolling good luck
while it is wise to learn from our
experiences it is wiser to learn from
the experiences of others or at least
learn about them in tandem and that's
what rick warren the author of the
purpose-driven life said and this is an
extremely true statement when it's
applied to trading we can excel at rates
far faster when we're incorporating the
experiences of others instead of only
looking at our own experiences and
learning by trial and error the first
experience that many traders make
especially novice traders is diving
directly into the deep end and when we
say deep end we're really just talking
about the financial risk category where
we're actually trading on a live account
with real dollars that our our own
there's a number of reasons why this
could be dangerous but ultimately it's
important for us to understand that this
isn't a matter of luck committing to a
technical analysis based strategy means
you're committing to mathematics and
you're really committing to science
which means before we go forward with
anything we should have a large sample
size that justifies why we are doing
what we're doing that showcases that we
are in fact proficient with the strategy
that we're using and this is another
area where many traders will jump the
gun they'll look at a sample size from a
single week and say oh we performed well
this week it's we're good enough to go
ahead and switch off this demo account
and go into the live markets and i am
here to tell you that is just not nearly
enough time give yourself multiple weeks
if not multiple months in multiple
different markets and multiple different
market conditions to really test your
strategy you shouldn't be afraid to find
out the truth the next mistake that
traders make is doubling down on losses
many of us have done this at one point
or another whether we're going to admit
it or not
the famous way that this happens is with
something called the martingale strategy
ultimately though we can really simplify
and shorten this bit about why this is
bad by understanding a true principle in
trading successful traders are always
working to shorten or cut down on losses
so that would not include a trader who
is doubling their losses hoping to make
up for a trade that just lost before
that one not only is this dangerous
because we are magnifying all of our
losses instead of minimizing them we're
also putting ourselves in a position
where we're pre-committed to enter into
a position following a loss which puts
us in an emotionally compromised state
and emotions as we know are not ideal
for trading but as we continue there's
another thing that is going to happen in
the trading world oftentimes and that is
the too much changing of strategies
issue
many traders in the beginning of their
trading careers will pursue a strategy
get frustrated with it early on or
encounter their first degree of trouble
and immediately swap to a completely
different strategy the problem is if you
do this the rubik's cube so to speak is
never going to be solved because you're
using a different equation every single
time that you switch strategies in order
to be proficient with anything we need
to use it through all types of market
condition conditions and adversities and
we need to understand where it excels
and where it fails that way we know when
to use it and when not to use it there's
not going to be any one strategy that is
blindingly going to lead you to success
in every market and every market
condition it's important to understand
that so it is better to spend your time
perfecting one strategy than swapping to
a ton of individual ones that don't
really have anything to do with what
you're already doing
the next mistake that traders make is
failing to control emotions
out of all of our little emotional guys
here the one that we really want to be
like is this yellow one in the center
this guy here is just happy simple as
that he's not over happy and he's not
angry to any degree when we're trading
we experience two types of tilts we go
on positive tilt which is when our
emotions are like this guy in the right
hand side they're just going through the
roof and we feel like we can't do any
wrong when this happens a lot of times
traders will go outside of their proper
risk management or their proper monetary
exposure amount that they decided in
their trading plan that they would limit
themselves to per trade because they
feel that they are just running so hot
while on the opposite side of the coin
when a trader is losing our emotions are
compromised in a sense that we're angry
and feel that sometimes we need to get
one back on the market or we need to get
even and this causes fomo trading and
force trading both of which sides of
this lead to disaster overall for our
roi our goal is to stay even keel have a
good attitude and stay calm and
controlled throughout the entire process
we won't we do not want to go on any
type of emotional swing whether it's to
the happy side or to the negative side
think algorithmically
we also don't want to blindly follow any
trading strategy and this is just
something that i see happen all the time
in the trading world traders will go
ahead and say this guy here that's
selling this indicator for you know
19.99 a month
for some suspicious reason is giving
everybody the answers to the universe
for only 20
that is not only silly to say out loud
but ultimately we don't want to follow
things when we don't understand what
that thing is doing in the first place
because we'll never be prepared to
identify if it's doing well or if it's
not doing well in a particular
particular market scenario because we
just don't understand what it's doing at
all we're just hoping for the best and
following along for the ride as crazy as
it sounds many traders do fall in this
category because they feel that someone
else will do better than where they are
currently at so what do they have to
lose well you have a lot to lose
especially if you're trading live
then the next one that many traders fall
to is too many indicators this is like
informational overload if we load up our
charts with 14 different indicators it's
going to be very difficult to see what's
going on behind the scenes with price
itself and if you are a technical
analysis trader it's extremely important
to understand price action understand
what price itself is doing instead of
gaining 14 second hand reads about
individual areas of what is happening in
the market it's always important to
couple any second hand read with the
main read which is what price itself is
doing
the next mistake that traders make a lot
is over trading over trading is going to
be when we simply continuously trade
maybe we're having a good day or a bad
day but we're basically trading to our
demise we're trading beyond our our rear
ends allow us to stay comfortable and
our emotions allow us to stay cool we're
trading beyond that point when we trade
beyond the moment that we are no longer
enjoying or staying correctly
emotionally managed we're increasing our
chances of failure we do not want to
over treat whatever the reason is it is
something that can be controlled by
allowing ourself a time frame of when we
are going to trade from it's as simple
as that
then we have lacking an exit strategy as
we go into trades it's great to when to
know when to enter that position but you
do need to know when to get out if you
don't know when to get out and you
haven't planned this ahead of time then
you're going to have scenarios where
your winner very quickly wipes away all
of its winnings or even worse becomes a
loser and vice versa we want to know a
time to get out of the trade if it's
going against us it's important to know
an exit strategy for a take profit level
as well as a stop loss level plan all of
this ahead of time you absolutely can do
it even if the reasoning is slightly
different than your reason for enter
and then we have traders that just don't
journal and this is honestly the
majority of traders the majority of
traders do not have the tenacity the
willpower or the attention span to
journal their positions there's been
plenty of times in my own trading career
where i absolutely did not journal
because of all of those reasons i just
mentioned i'm not ashamed to admit it
because i was able to correct that issue
and it helped me tremendously by
journaling we're able to systematically
take a look at everything that we are
doing and it can allow us to change one
detail at a time measure how it impacts
our success whether it's for better or
for worse and continue on from there it
allows us to take one step at a time
when we don't journal we just simply
have zero way to absolutely do this
unless you are just the mega mind of the
universe
then we have expecting the same results
on different assets this one is more of
a low-key mistake that traders make i
see traders regularly do this without
realizing that they're doing it they
will develop a trading plan and a
trading strategy that was formulated
around say the es or crude oil and
ultimately they'll switch over when the
day is boring for crude oil or es and
try to apply it on the nq a market that
does perform quite differently than
crude oil and the yes and then they will
simply be amazed at why they're not
having a successful day the truth is
different markets and different assets
have different behaviorisms they have
different patterns they have different
ways of moving about and your strategy
that is going to be outlined is going to
be susceptible to
increased degrees of failure if you swap
it over to a different market
the thing is it can also improve your
strategy but how do we go about doing
this if we're going to go to another
market that's not inherently wrong but
we should always demo our strategy on a
demo account on that market before we
switch to it live and just simply expect
to do well
we've all heard the estimates that 80 to
90 percent even by some estimations of
traders are losing money that means if
you want to be in that top 10 percent
that top five percent or even the top
one percent you're going to need to do
things that the other 90 percent are not
that can mean showcasing better
emotional control that could mean
allowing yourself to adhere to a trading
plan that could mean journaling your
positions to systematically improve
these are all things that require a bit
more effort and because of that you
would be surprised how many traders just
completely disregard them any one of
these things could lead to a small or
possibly large improvement in your
trading results but you'll never know
until you try and figure all of this out
for yourself good luck out there happy
trading i'll see you all very soon
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you