I m not exaggerating when I say this. If you can some how manage to not make any of these
7 mistakes I m about to share with you. You will instantly become a better trader. It
s important to know how to trade, but it s as equally important to know how NOT to trade.
These are the 7 biggest mistakes I see people making when trading. Let s just jump straight
into it. The first and the most crucial mistake I see
people making, is entering too late. Look, I completely understand why people make this
mistake. It s a psychological emotion that is just embedded in our head as human beings,
and that emotion is the fear of missing out. If you don t know this already, and you re
a beginner trader. You never EVER want to trade with emotion. It s a lot easier said
then done. If you actually pay attention to all these mistakes, almost all of them are
emotionally driven. The sooner you stop trading with emotion, the sooner you will start making
money. Even the best of the best get caught up in
their emotions every once in a while. And sometimes it hard to realize when it s happening
to yourself. But that s just exactly what separates the
profitable traders from the unprofitable. It s just one of the things you slowly get
better at as you gain trading experience. The most often time people trade with their
emotions is when they start thinking they are going to miss out on the party.
I see this happen all the time. You look at the chart and you spot a really strong resistance
line. You know in the back your head if the price ever crosses this line, you can pretty
damn certain the price will go up from here. So your initial plan is you want to enter
right when the price crosses this line. Now when day trading, a lot of the times your
looking at multiple different stocks at the same time, you gotta look at screeners, news,
different indicators, etc. You come back to the original stock and while
you were looking at some other ones, there was a sudden spike in price and the price
skyrocketed past the resistance level just as you predicted.
The only thing is, the price is already way above the line, and your not in the trade.
This is the exact point of what separates a great trader vs an amateur.
The amateur would start feeling emotions, thinking if they don t enter right at this
very point they are going to miss out on sooooo much profit. So they enter as fast as they
can, even though the price is way above their initial entry mark and they are taking up
so much more risk entering a this high of a price.
A professional trader would have realized what s happening and just call it a missed
opportunity, and start looking for other and better plays. Or maybe even wait for a pull
back to happen so they can enter a better price with less risk.
My point is, if your late, your late. Don t get caught trying to chase the party and
get burnt because you entered at the top. Because most of the time, its going to look
like this, where there was a sudden spike, you entered late, and it ended up being the
top and it stared falling right after you entered.
Stick to your strategy, stick to your game plan, and don t change it no matter what.
If you missed the entry point. Move on to the next opportunity, or be patient and wait
for it to drop to a better price.
Tip number 2. Using too much money. Let s go over a scenario that I m sure almost all
of you have gone through in your trading career. Let s say you initially started trading with
$100 per trade, a decent amount for you but nothing crazy. And your trading strategy is
actually working pretty well. Your following your strategy perfectly to a tee, and you
ve been insanely profitable every single day for the past week. Making $500.
Then you get this beautiful bright idea, well I ve been trading with $100 every day and
I made $500, What if I started trading with $1000 every day so I can make $5000.
Now let s say in this scenario, $1,000 is a lot to you. This is an absolute terrible
mistake, and I see beginners make this one so often. Why is this a mistake?
Well its pretty simple. If you re trading with an amount that your not ok with losing,
it s without a doubt you will start trading with emotion.
Whenever the price goes towards a direction that you don t want it to go and your balance
starts dropping a crazy amount fast because you are using a higher percentage of your
portfolio, your going to start freaking out. Making you panic sell more often than you
normally would. Whenever trading with an amount that s your
not comfortable losing, it almost inevitable that you will trade with emotion.
Trading is not a get rich Job. It s about growing your account slowly and consistently.
The sooner you realize trading is not a get rich quick scheme, the sooner you will start
becoming profitable.
Tip number 3. This mistake I m sure every trader has made, and it ended up biting them
in the butt because of it. Not setting a stop loss. Especially in day trading, you should
always be using a stop loss. There s no reason for you not to.
Even with swing trading and long term trading, there will always be a point in the chart
where you can say, if price ever goes below this line, I simply don t want to be in the
trade any more. It happens all the time, you see a trade,
it looks extremely bullish, you enter with excitement because you think its about to
go to the moon. You don t set a stop loss because your emotions of excitement and greed
are blocking your clear thoughts, or you aresimply just too lazy to set one.
You go grab a coffee and come back, and the chart just absolutely tanked within 5 minutes.
Completely ruining your portfolio with a massive loss. And I ve even seen it get worse from
here. Where people will think to themselves well, I m already in here at the bottom, I
might as well just wait it out . Then the stock keeps dropping and dropping, and soon
they absolutely have to exit the trade unless they want a $5 balance.
There will always be a point on the chart where you don t want to be in a position if
the price goes below that point. Some of you may like larger stop losses, some of you may
like tiny ones. It doesn t matter how big or small it is, just have one.
The next mistake I see people making is using way way way too many indicators. I know, trading
view has millions of Indicators and you re almost like a kid in a candy shop that can
t choose which one they want, and just end up choosing them all.
Sometimes I ll look at beginner trader s chart setups and their chart will literally look
like this. Where they have millions of indicators, support, resistances, Fibonacci charts, and
everything under the rainbow. There is absolutely no need for this. One,
you can even tell what s going on, and two, most indicators are just momentum indicators,
so they all tell the same story. Stick to one strategy. Don t think just because
you add 4 successful trading strategies together that it will make one mega trading strategy.
That s not how it works. Use a couple indicators, use one strategy, and keep your chart clean
and easy to read.
The 5th mistake is a very easy one to avoid but yet people still end up making it all
the time. Trade with the trend. In basically all of my trading strategy videos they all
have a common core strategy, trade with the trend.
It s pretty simple. You want to buy when the market is going up, you want to sell when
the market is going down. I know, it simple. But I still see way too
many people trying to over complicate things and try to buy the absolute bottom of the
market. They will see a stock that has been dropping for the past month and think they
figured it out and found the exact bottom. What are the chances that out of the past
month the stock falling, you found the exact bottom right here.
If a chart has been falling, its more likely to keep falling. If a stock has been rising,
it s more likely to keep rising. Now you may be asking yourself. How do I know
if a chart is in a uptrend or downtrend. Well, I explain it in depth in a lot of my other
trading videos, but Ill give a quick explanation. You get on your trading platform. Add a 200
day exponential moving average. If the price is above that 200 day ema, its
an up trend, if its below it, it s a downtrend. It really is that simple.
Now of course every trading strategy is different. For some strategies, an important part of
the strategy, is buying in a downtrend. or buying the bottom. But for the most part you
should be thinking, I m only buying in an uptrend and only shorting in a down trend.
It ll make your life so much easier when you trade with the flow of the market.
This next mistake is one that a lot people miss, and it can be the difference maker in
you fixing your bad habits or not. Lack of record keeping. If you are beginner trader
or even if you ve been in the trading game for a long time. It s always good to keep
track of your trades. You can always improve. Always. It s important
to look back at your past trades to see what you did good, so you can keep doing those
specific things. But it s also nice to look back at your past trades and see what you
did incorrectly. To help bring your emotions and bad trades
under control. It s always nice to have a trading log. Where you take screenshot or
even a video of the chart before you even enter.
Write down why you want to enter the trade in the first place. Whether it was fundamental,
technical, or from a news article. Write down the exact point of when you re going to enter
the trade. Then when you re going to exit. This will not only give you a direct plan,
which is what you should have in mind before entering every trade anyway, but it will also
will show you if you yourself followed your own plan.
Once you exit the trade. Write down why you exited. What emotions were you feeling during
the trade. What you did wrong, what you did right.
Keeping a trading log helps you achieve two goals. The first is to make money. The second
is to become a better trader. You might not succeed on the first goal, but you will absolutely
succeed on the second goal. You should always and forever try to become a better trader
after each and every trade. No matter how much experience you have. You can always improve.
Trading revels your weaknesses that you never knew you had, but it can also make you a stronger
person learning from them. It s important to learn from your mistakes, not just keep
making them.
One of those mistakes is setting your stop loss too high or too low. That s why in this
video I tell you a secret trick that I use all the time, to help place my stop losses
in the best spot possible so you don t get stopped out as much, but it s still an efficient
stop loss. Go check that out and ill see you guys next time.