Traders don’t just buy and sell. They assume and manage risks. Hence, traders should be risk experts.
Your job as a trader is to take on risk and avoid uncertainty.As a trader, you need to focus on calculating how much you can win or loss and the probabilities of each outcome.
After intense studying and analysis, you might get an idea of what might happen and their chances. You can then choose to proceed if the odds favor you.
Commom mode failure is a trader having consecutive losses. A streak of losses damages your confidence and makes you doubt your trading strategy. It can also cause overtrading as you try to make back the losses. These effects will speed up your market demise.
Traders are far too confident. There are more unknowns than we think, and we need to be aware of them.
Many traders choose to focus on what they know. For instance, they see a perfect chart pattern, and they want to trade it. They know that it’s a fantastic trade setup. They know that the volume is supporting their strategy. They know that they have a good reward-to-risk ratio.They know everything. Hence, these traders take the trade.But they should have factored in what they don’t know. For instance, an important upcoming economic announcement. The response of the market to that announcement is an unknown, at least to a technical trader.If more attention is given to this unknown, they might go for a more sensible decision. They might decide to delay their trade entry or skip the trade altogether.This mindset of respecting the unknowns relates to a trader’s ego. You need to put down your ego and recognize that there are things you don’t know.
The safer we feel, the more danger we are in. having more money in our trading account reduces risk. It makes us feel safe.But exactly because we feel safe, we start to relax our trading rules to take subpar trades. We ignore our position sizing models and overtrade.
After intense studying and analysis, you might get an idea of what might happen and their chances. You can then choose to proceed if the odds favor you.
Commom mode failure is a trader having consecutive losses. A streak of losses damages your confidence and makes you doubt your trading strategy. It can also cause overtrading as you try to make back the losses. These effects will speed up your market demise.
Traders are far too confident. There are more unknowns than we think, and we need to be aware of them.
Many traders choose to focus on what they know. For instance, they see a perfect chart pattern, and they want to trade it. They know that it’s a fantastic trade setup. They know that the volume is supporting their strategy. They know that they have a good reward-to-risk ratio.They know everything. Hence, these traders take the trade.But they should have factored in what they don’t know. For instance, an important upcoming economic announcement. The response of the market to that announcement is an unknown, at least to a technical trader.If more attention is given to this unknown, they might go for a more sensible decision. They might decide to delay their trade entry or skip the trade altogether.This mindset of respecting the unknowns relates to a trader’s ego. You need to put down your ego and recognize that there are things you don’t know.
The safer we feel, the more danger we are in. having more money in our trading account reduces risk. It makes us feel safe.But exactly because we feel safe, we start to relax our trading rules to take subpar trades. We ignore our position sizing models and overtrade.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
SurgingIc3 : The issue is almost all the traders have the wrong mentality of asking for P/T instead of S/L. Yes, having a P/T is good but having a S/L is even more fundamental esp if you're day trading.
Making profits is everyone objective in the stop market but capital preservation is an even more fundamental value that is somehow lost.
Cash Printer : Actually should just buy or sell when entry window are right. Dont think too much.
Bondok : I’m really sorry guys
All what you are saying only on paper or nice words
But the reality is unknown
How many times did you follow all these stuff and you end up losing
How many times the company earnings more than 3 B$ like open door as a sample and the price go down
I really believe it’s all up to the algos
They control everything
By the way
Algos started only few months ago following new ways to make us only lose
No matter what you do
First they let us buy and price once it goes up a little
They take it down like creamy to keep us up there in the air waiting
Then they stay down there go up 10 c or so and down again
Then
They go even more down then they go up 10 c or so
And so on
It’s insane
There is no way to invest no way to hold
If you got in and once you see som money you have to sell
Or in a few minutes you would be a bag holder
Another thing
They know about the day trade patterns
so they use it as well against us
Anyway
This is how I see it